I followed this mattress strategy: I put my 401k / IRA money in index fund with 90% in equity and 10% fixed income. I thought I could just relax and don’t think about my 401k until I retire. Now I look back, market timing at micro level may not work – bet on stocks go up or down, but market timing should work out well at macro level: If I move my money out of market anticipating the coming recession – which is widely expected, I would be so much better off.
The market went up 950 points over 4 consecutive days in 2002. Then it kept going up while people were waiting for the pull-back to put their money in. Tough to time that one.
Yes, this is hard time. But we don’t need to buy into the bottom to do well.
stupid Wrote: ------------------------------------------------------- > I followed this mattress strategy: I put my 401k / > IRA money in index fund with 90% in equity and 10% > fixed income. I thought I could just relax and > don’t think about my 401k until I retire. You still have this option. Now I > look back, market timing at micro level may not > work – bet on stocks go up or down, but market > timing should work out well at macro level: > > If I move my money out of market anticipating the > coming recession – which is widely expected, I > would be so much better off. The stock market and the economy are two different things. The market can go up even if we are in/go into a recession (leading indicator). Market timing is hard. It only seems easy.
We covered this ad nauseum yesterday, go find the post…
So the old good mattress strategy still comes up on top?