To thebigzwatson:
FYI: Here is what happened in 1987. In January, many speculators and inexperienced investors were diving into stocks, which is a contrarian sell signal. i had done better than I thought I would; so being risk averse by nature, I went to money markets. The market then continued upward through August in what many thought was a speculative frenzy. I held money markets the entire time and was miserable about the money that i had left on the table. Then October 19 happened and by December 31 I had done better than anyone who stayed in stocks during the entire year.
This year has been unprecedented (even back to the flu pandemic of 1918). People can congratulate themselves on their courage at staying in the market over the whole year. Nevertheless the stock market is beyond overvalued. No one can be faulted for taking money off the table. Ultimately I believe that the market will crash. No one knows when and I might be wrong.
If you have 20 years before retirement, then you might consider choosing a comfortable asset allocation, e.g., 50% stocks & 50% G (or say 25% G 25% F) and just rebalance periodically to maintain it. Meanwhile, you can get to that allocation from 100% G by moving some fixed percentage of your G fund to a stock fund each month. Another way would be to put say 5% into stocks each time the stock indices go down 5% until you reach your asset allocation goal.
Either way don't get discouraged. Take your time to retirement and consider setting an asset allocation that you can live with and getting there by moving systematically into a stock fund some percentage of the G assets.
The worst thing about moving money out of stocks is deciding when or how to get back in. This is why trading is generally a bad idea.
These are just suggestions. No one knows what is the best course of action for a given person but that person alone.
Good luck,
Tex
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FYI: Here is what happened in 1987. In January, many speculators and inexperienced investors were diving into stocks, which is a contrarian sell signal. i had done better than I thought I would; so being risk averse by nature, I went to money markets. The market then continued upward through August in what many thought was a speculative frenzy. I held money markets the entire time and was miserable about the money that i had left on the table. Then October 19 happened and by December 31 I had done better than anyone who stayed in stocks during the entire year.
This year has been unprecedented (even back to the flu pandemic of 1918). People can congratulate themselves on their courage at staying in the market over the whole year. Nevertheless the stock market is beyond overvalued. No one can be faulted for taking money off the table. Ultimately I believe that the market will crash. No one knows when and I might be wrong.
If you have 20 years before retirement, then you might consider choosing a comfortable asset allocation, e.g., 50% stocks & 50% G (or say 25% G 25% F) and just rebalance periodically to maintain it. Meanwhile, you can get to that allocation from 100% G by moving some fixed percentage of your G fund to a stock fund each month. Another way would be to put say 5% into stocks each time the stock indices go down 5% until you reach your asset allocation goal.
Either way don't get discouraged. Take your time to retirement and consider setting an asset allocation that you can live with and getting there by moving systematically into a stock fund some percentage of the G assets.
The worst thing about moving money out of stocks is deciding when or how to get back in. This is why trading is generally a bad idea.
These are just suggestions. No one knows what is the best course of action for a given person but that person alone.
Good luck,
Tex
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