Am I "buying high" if I transfer stable value funds over to stock index fund now?

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LXEX55
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Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by LXEX55 » Sun Sep 16, 2018 2:12 pm

I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.

software
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by software » Sun Sep 16, 2018 2:19 pm

What you are doing currently is called market timing and it has already cost you dearly (whatever your expenses are in your 401k).

You should have always been in your 50/50 allocation if that is what your long term plan is, so there is no reason to wait any longer to make the move.

I’m sure if you post all your funds and expense ratios in the format of “asking portfolio questions”, people on this board would be happy to help you select the best options.

LXEX55
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by LXEX55 » Sun Sep 16, 2018 2:32 pm

software wrote:
Sun Sep 16, 2018 2:19 pm
What you are doing currently is called market timing and it has already cost you dearly (whatever your expenses are in your 401k).

You should have always been in your 50/50 allocation if that is what your long term plan is, so there is no reason to wait any longer to make the move.

I’m sure if you post all your funds and expense ratios in the format of “asking portfolio questions”, people on this board would be happy to help you select the best options.
How could I always have been in index funds if my employer does not offer them? I am currently employed, I must go with the options available to me. I plan to move the funds, upon my retirement, which may be in as little as three months. My employer used to offer index funds, but, about eight months ago, dropped them. Knowing I was near retirement, I simply switched over to stable value, knowing I would move them upon retirement to Vanguard.

livesoft
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by livesoft » Sun Sep 16, 2018 2:34 pm

You may have sold low when you moved to the stable value fund. Since stock markets march higher over time, the current market values are guaranteed to be lower than they will be in a few years.

I've been retired awhile and I put zero faith in any predictions about a market correction. There are ALWAYS predictions floating to the surface about market corrections. History shows that most of them have been wrong, wrong, and wrong. And the stock market is always so high. That's the nature of something that marches inexorably higher over time. One had just better get used to it.
Last edited by livesoft on Sun Sep 16, 2018 2:40 pm, edited 2 times in total.
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MotoTrojan
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by MotoTrojan » Sun Sep 16, 2018 2:35 pm

Lot of concerns here. Why no international? Less worried about the move and more so the reasoning. Why do you expect a correction? We just had one did we not? How often is the market at an all-time high?

delamer
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by delamer » Sun Sep 16, 2018 2:36 pm

What if the market rises another 15% and then there is a 10% correction?

You will end buying on a dip but still pay more than if you bought today.

There are have been threads on this forum at least as far back as 2015 started by people who were afraid to invest in stocks because they were convinced a correction was imminent.

No one knows when the next correction will come.

If you are uncomfortable going “all in” in the stock market now, then come up with a plan to gradually do so over the next year. That’s easy to do in an IRA, because there are no tax consequences.

LXEX55
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by LXEX55 » Sun Sep 16, 2018 2:41 pm

MotoTrojan wrote:
Sun Sep 16, 2018 2:35 pm
Lot of concerns here. Why no international? Less worried about the move and more so the reasoning. Why do you expect a correction? We just had one did we not? How often is the market at an all-time high?
No, no international. "Too many things can go wrong in too many places." If I take a beating so be it. If I am not mistaken, Mr. Bogle said he does not currently have any international. Anyway, why go off topic with this question?

LXEX55
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by LXEX55 » Sun Sep 16, 2018 2:42 pm

delamer wrote:
Sun Sep 16, 2018 2:36 pm
What if the market rises another 15% and then there is a 10% correction?

You will end buying on a dip but still pay more than if you bought today.

There are have been threads on this forum at least as far back as 2015 started by people who were afraid to invest in stocks because they were convinced a correction was imminent.

No one knows when the next correction will come.

If you are uncomfortable going “all in” in the stock market now, then come up with a plan to gradually do so over the next year. That’s easy to do in an IRA, because there are no tax consequences.
Thank you, that is sound advice. Much appreciated.

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villars
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by villars » Sun Sep 16, 2018 2:49 pm

This is a similar question to DCA vs lump sum. Only difference is that the downside of putting the 50% in stocks and then suffering a correction is worse because you are entering retirement.

My advice is to put 25% of portfolio is stocks now. Another 25% in one year.

software
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by software » Sun Sep 16, 2018 2:52 pm

LXEX55 wrote:
Sun Sep 16, 2018 2:32 pm
software wrote:
Sun Sep 16, 2018 2:19 pm
What you are doing currently is called market timing and it has already cost you dearly (whatever your expenses are in your 401k).

You should have always been in your 50/50 allocation if that is what your long term plan is, so there is no reason to wait any longer to make the move.

I’m sure if you post all your funds and expense ratios in the format of “asking portfolio questions”, people on this board would be happy to help you select the best options.
How could I always have been in index funds if my employer does not offer them? I am currently employed, I must go with the options available to me. I plan to move the funds, upon my retirement, which may be in as little as three months. My employer used to offer index funds, but, about eight months ago, dropped them. Knowing I was near retirement, I simply switched over to stable value, knowing I would move them upon retirement to Vanguard.
I never said you had to be in index funds, but just because your 401k doesn’t offer index funds is not in itself a good reason to be 100% stable value. What are the expenses on that fund? What are all your other options? Without that information it would be impossible to tell but in general allowing your investment choices dictate your asset allocation is a poor approach. You should set your asset allocation (which it sounds like you have) and then do your best to find the lowest cost options to hit that allocation.

tibbitts
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by tibbitts » Sun Sep 16, 2018 3:17 pm

LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)

software
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by software » Sun Sep 16, 2018 3:27 pm

tibbitts wrote:
Sun Sep 16, 2018 3:17 pm
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)
I would love to know what stable value funds are yielding 7% right now...

Hmm, high investment returns with little or no risk, why does that sound familiar. Oh yes, it is the number one red flag for recognizing a Ponzi scheme: https://www.sec.gov/fast-answers/answer ... l#RedFlags

LXEX55
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by LXEX55 » Sun Sep 16, 2018 3:32 pm

tibbitts wrote:
Sun Sep 16, 2018 3:17 pm
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)
My stable value funds are on the very low end of the return spectrum, like your 1.85%. There is no doubt that I want to move out, it is only a question of when. I just wanted the money somewhat protected for the few months that I have remaining at work until I can switch over to Vanguard IRA. Finalizing retirement, relocating, have a difficult job, and taking care of a wife with cancer, and seeing my sister pass of kidney failure, was very draining. I simply did not have the mental acuity or clarifty of mind to sit and analyze the funds made available by my employer. Also should the market of tanked, I was not emotionally strong enough at that time to see my assets drop in value. Enough things were going wrong. For a few months I just put things on hold. My bad, I know. You cannot put life on hold.

delamer
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by delamer » Sun Sep 16, 2018 3:33 pm

software wrote:
Sun Sep 16, 2018 3:27 pm
tibbitts wrote:
Sun Sep 16, 2018 3:17 pm
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)
I would love to know what stable value funds are yielding 7% right now...

Hmm, high investment returns with little or no risk, why does that sound familiar. Oh yes, it is the number one red flag for recognizing a Ponzi scheme: https://www.sec.gov/fast-answers/answer ... l#RedFlags
Even the TSP G Fund has “only” returned 2.7% in the last 12 months.

tibbitts
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by tibbitts » Sun Sep 16, 2018 3:41 pm

software wrote:
Sun Sep 16, 2018 3:27 pm
tibbitts wrote:
Sun Sep 16, 2018 3:17 pm
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)
I would love to know what stable value funds are yielding 7% right now...

Hmm, high investment returns with little or no risk, why does that sound familiar. Oh yes, it is the number one red flag for recognizing a Ponzi scheme: https://www.sec.gov/fast-answers/answer ... l#RedFlags
At least until very recently there were people posting here that they had a teacher's retirement annuity in NYC that had a guaranteed 7% offering. As far as I know it's still there and over 100,000 current or past employees are benefiting from it. Basically nobody was withdrawing from it, for obvious reasons. I'm not one of the people eligible to invest in it so I don't keep up with it.

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Christine_NM
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by Christine_NM » Sun Sep 16, 2018 3:49 pm

Do you have any taxable investment accounts or is everything in the 401k? If you have a taxable account you could put it all in an index fund in order to rebalance toward 50/50. Unless there would be cap gains taxes. That's why we need the Asking Portfolio Questions format to show all the possibilities.

However, to answer the question as asked, without further info, I would stay put in stable value until after retirement. You are right, it is not your fault that you lost the index fund option. After retirement, transfer the 401k to an IRA and set up the 50/50 allocation. It is really unlikely that a high-cost fund will earn serious money in the next 6 months or so. But it might lose enough to make you regret buying a suboptimal fund.

happy retirement and good luck to DW.
17% cash 47% stock 36% bond. Retired, w/d rate 2.85%

software
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by software » Sun Sep 16, 2018 3:50 pm

tibbitts wrote:
Sun Sep 16, 2018 3:41 pm
software wrote:
Sun Sep 16, 2018 3:27 pm
tibbitts wrote:
Sun Sep 16, 2018 3:17 pm
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices. Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market? Would I not be “buying high” at this moment in time? Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that? Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
I think you don't realize how insufficient your information is to answer your question. We have people post here with 7% stable value funds. Even I have a 4% stable value fund (wish I could contribute more!.) You'd be nuts to ever move your money away from your employer with the 7% stable value fund. I also have a 1.9% stable value fund - well I have about $300 in it. I used to have much more. Like many it hung on for a while while rates dropped, but now is close to its historic bottom (1.85%.)
I would love to know what stable value funds are yielding 7% right now...

Hmm, high investment returns with little or no risk, why does that sound familiar. Oh yes, it is the number one red flag for recognizing a Ponzi scheme: https://www.sec.gov/fast-answers/answer ... l#RedFlags
At least until very recently there were people posting here that they had a teacher's retirement annuity in NYC that had a guaranteed 7% offering. As far as I know it's still there and over 100,000 current or past employees are benefiting from it. Basically nobody was withdrawing from it, for obvious reasons. I'm not one of the people eligible to invest in it so I don't keep up with it.
Edit: after looking further into it, looks like it is a legit 7% return, but is subsidized by billions of dollars of taxpayer money. Seems like that would be a pretty extreme special case.

RickBoglehead
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by RickBoglehead » Sun Sep 16, 2018 4:39 pm

LXEX55 wrote:
Sun Sep 16, 2018 2:32 pm
software wrote:
Sun Sep 16, 2018 2:19 pm
What you are doing currently is called market timing and it has already cost you dearly (whatever your expenses are in your 401k).

You should have always been in your 50/50 allocation if that is what your long term plan is, so there is no reason to wait any longer to make the move.

I’m sure if you post all your funds and expense ratios in the format of “asking portfolio questions”, people on this board would be happy to help you select the best options.
How could I always have been in index funds if my employer does not offer them? I am currently employed, I must go with the options available to me. I plan to move the funds, upon my retirement, which may be in as little as three months. My employer used to offer index funds, but, about eight months ago, dropped them. Knowing I was near retirement, I simply switched over to stable value, knowing I would move them upon retirement to Vanguard.
When you reached 59 1/2 you likely had the ability to rollover funds to an IRA, then invest in anything.

We pulled every penny our of my wife's account and then did a ROTH conversion on part. May convert more this year.

Ron Scott
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by Ron Scott » Sun Sep 16, 2018 5:00 pm

MotoTrojan wrote:
Sun Sep 16, 2018 2:35 pm
Lot of concerns here. Why no international?
We don't need no international.

For people who somehow just have to invest in it for whatever reason 20% of equities MAX. Better 0%.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

ReadyOrNot
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by ReadyOrNot » Sun Sep 16, 2018 5:02 pm

It's no big deal that you sat out of the markets for a few months during a turbulent time in your financial life. If you had a sudden windfall it would have been considered fine. You missed a few months of whatever happened in the market, but you made no big mistakes and had no losses.
Now you have to figure out how to move forward. Except for those few months, would you have been comfortable rolling over your previous asset allocation into an IRA with a similar allocation? Then you can go ahead and do that. Or if your employer's plans had kept your old options but cashed you out with a lump sum when you retire, how would you invest? The few months of movement that you missed weren't so huge -- they don't need to affect your decision that much.
And if you want to gradually re-invest, that's OK too -- you miss some of the market movement while you are doing that, but that's OK.
But if you will really regret not re-investing, don't wait too long.

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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by KyleAAA » Sun Sep 16, 2018 6:08 pm

Nobody knows what the market will do next year, but it's very likely to be much higher in 20 years.

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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by pkcrafter » Sun Sep 16, 2018 6:33 pm

LXEX, there is some important information missing in you post and that makes replies difficult. See below in blue.
LXEX55 wrote:
Sun Sep 16, 2018 2:12 pm
I will be retiring between December 1 of this year and March 30th of 2019, depending on whether my wife needs a medical procedure performed or not. As of now, my entire 401k money has been moved over to a stable value fund as my employer offers some really poor mutual fund choices.
Is this a new 401k plan that doesn't have good options, or is it the same plan you have always had, but you got out? What was you overall asset allocation before you got out?

Do you have other tax-advantaged or taxable accounts?
Once retired, I plan to follow a couch potato portfolio of two Vanguard index funds: 50% stocks (no international) and 50% bonds. I have enough cash in savings accounts to last at least one year into retirement, probably more, until I need to touch my 401k money. I was wondering, with the stock market so high, would it be wise for me to leave my money in the stable value funds for a while even after I retire and see what happens to the market?


50/50 might be OK, but some of that decision is based on your initial withdrawal rate. What is that going to be? If you simply got out because of the high market, you have put yourself in a tough spot--when to get back in.
Would I not be “buying high” at this moment in time?


If you got out very recently because of new 401k funds, then you should get back in. Getting totally out of the market is always a bad call, but adjusting allocation heading into retirement is OK.
Although, I am certainly no prophet, I do put some faith in the predictions that a market correction is not far off. Am I wrong to think like that?


It usually leads to subsequent suboptimal decisions and overall lower returns.
Or upon retirement should I just switch my funds over to Vanguard index funds and ignore current market conditions? I do not know if it is relative to the question, but, I am 63 years old.
This answer depends on what your withdrawal rate needs to be and your ability to take a market hit. The problem with reacting by getting out is it offers no guarantee that there won't be another problem when you do decide to get back in. Also when do you get back in--after a 10% drop, 25%, what?

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

drzzzzz
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by drzzzzz » Sun Sep 16, 2018 7:30 pm

You have a lot of stressors right now and you should do what feels comfortable to you and don't worry about what this group thinks since they will only tell you to decide on an asset allocation that is appropriate for you and invest in it now, not later. You are correct that the market can go down at any time and it also goes up with time as long as you have a long enough time horizon. Dollar cost averaging is one thing to think about especially if it makes you more comfortable to enter the market. The asset allocation is important - I am entering retirement and am at 50% stock, 50% cash/bonds (more cash than most on here would say is acceptable, but cash yields are finally closer to bonds). What that means to me is that a 40% drop in the stock market will only cause my portfolio to dip 20% which I am comfortable with - others will say I am foolish since I am capable of taking more risk, but at the end of the game, having more money doesn't keep the inevitable dying away. I would rather be mentally comfortable, than regret the inevitable downturn and obsess about the lower balance sheet.

Mickey7
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by Mickey7 » Sun Sep 16, 2018 7:57 pm

drzzzzz wrote:
Sun Sep 16, 2018 7:30 pm
You have a lot of stressors right now and you should do what feels comfortable to you and don't worry about what this group thinks since they will only tell you to decide on an asset allocation that is appropriate for you and invest in it now, not later. You are correct that the market can go down at any time and it also goes up with time as long as you have a long enough time horizon. Dollar cost averaging is one thing to think about especially if it makes you more comfortable to enter the market. The asset allocation is important - I am entering retirement and am at 50% stock, 50% cash/bonds (more cash than most on here would say is acceptable, but cash yields are finally closer to bonds). What that means to me is that a 40% drop in the stock market will only cause my portfolio to dip 20% which I am comfortable with - others will say I am foolish since I am capable of taking more risk, but at the end of the game, having more money doesn't keep the inevitable dying away. I would rather be mentally comfortable, than regret the inevitable downturn and obsess about the lower balance sheet.

+1

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vineviz
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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by vineviz » Mon Sep 17, 2018 6:30 am

Ron Scott wrote:
Sun Sep 16, 2018 5:00 pm


We don't need no international.
Until you do, of course.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by Ron Scott » Mon Sep 17, 2018 8:04 am

vineviz wrote:
Mon Sep 17, 2018 6:30 am
Ron Scott wrote:
Sun Sep 16, 2018 5:00 pm


We don't need no international.
Until you do, of course.
Which of course can be said of buying REITs, gold, junk bonds or pork bellies. You see some short period of time where such ownership bests a simple stake in US equities. Then it will pass.

Jack Bogle recommends holding only US equities and that’s how he plays it personally. He’s softened a bit over time and suggests to those who feel they must for some reason hold international to limit it to 20% of total equity, but he doesn’t believe it’s helpful for diversification.

Not sure where so many people in this forum got their ideas on this. Owning international isn’t Bogle’s approach. Who’s is it? Vanguard’s?
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: Am I "buying high" if I transfer stable value funds over to stock index fund now?

Post by vineviz » Mon Sep 17, 2018 8:11 am

Ron Scott wrote:
Mon Sep 17, 2018 8:04 am
.
.

Not sure where so many people in this forum got their ideas on this. Owning international isn’t Bogle’s approach. Who’s is it? Vanguard’s?
It’s pretty much every expert’s approach EXCEPT Bogle’s.

I have a lot of respect for the man, but he’s just a man and therefore sometimes wrong. International investing is one of the things he’s wrong about.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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