Recently I sold off my 401k at a huge loss. However, I figured that the market will go down some more. I’m thinking about buying at the 8000 range and trying to sell back up when it get to 9000 and then do it again. Have any of you guys done this with your 401k. It seems hard to do, because some funds have a 5% load fee, others have a redemption fee if you are holding it for less than x days, and others restrict you from buying the fund for 30 days once you have sold it, to prevent frequent traders. However, I found about 4-5 funds that I could trade off of without front end fees or redemption fees.
I did a thing that you’re never supposed to do… My company’s stock went down WAY more than the market one day, so I traded about 60% of the 401k into the company stock fund, when our valuation got back in line with the market, I went back to my old allocation (which is mostly indexes). I made a quick buck by taking what most financial planners say is a stupid risk. Then again, I’m 25 and save boatloads of money, so if I got wiped, it wouldn’t be the end of the world. I’d say if you are in your 20s and want to play with it, sure, your future contributions will probably have a bigger effect than your current allocation decisions. If you’re in your 40s. Just admit that markets do this and hold.
It’s just silly to trade with a 401k. If you want to trade, open an investment account with separate money and do it there. With a 401k, your goal is to have it grow and compound so that it is ready for you when you retire. It is too easy to make big trading mistakes and also get eaten by transaction costs. With a 401k, you basically change your positions under three conditions: 1) Rebalancing to your strategic allocations. 2) Changed strategic allocations in response to changes medium or long term market expectations 3) Changed allocations in response to changed liquidity requirements or time horizons
also by taking an aggressive stance with your non-qualified funds you leave yourself the ability to possibly take a tax deduction for losses. cant do this with qualified monies. If your trying to time the market, you might as well be able to write off some losses since chances are you will likely incur them. good luck though! i hope you do well.
I just went all in on the SSO. I’m in my early 30’s and thought, “F IT”.