What happens to those folks that were just getting ready to get their money out of the market?

[kentuck]

Out of 401K's or stocks or whatever?

Is it just the roll of the dice? They should have taken their money out a few weeks ago?

How is this different from casino gambling? If you leave the table while you are ahead, you are a winner. If you stay in the game too long, the house takes all your money.

It seems to be all in the timing?

Is the market just one big roulette table?

[ingac70]

1. Actually.....

your chances are better gambling. The markets are rigged, manipulated by scum constantly. At least the roulette table is fair.

[JuniperLea]

8. Indeed! There are far more regulations on gambling...

Than on the stock market these days.

[Eddie Haskell]

19. Wanna bet?

[TBF]

2. Yes, the market is a casino. Some of us have been saying this for years.

The government admits it and there are warnings on paper and digitally every time you do a trade. Not insured by the US government.

[MADem]

4. I've been saying this very thing for, well, decades. NT

[Harmony Blue]

38. This is why we must oppose privatization of Social Security

at all costs.

[HockeyMom]

3. I have always said this to my husband

Republican Faux News watcher who is almost 63 years old. What if your 401K retirement TANKS right when you are about to retire?

If SS is a "ponzi scheme", then "investing" in Wall Street is gambling. I cannot escape my family history as the Grand-daughter of 1929 Wall Street Broker. Sorry, NO. I would rather stuff money in my mattress than give it to Wall Street.

[dmallind]

17. Do you think he intends to take it all out in one lump on retiremwent day?

If he's got enough to worry about that's a very silly move. Besides as any even vaguely financially savvy investor knows, as you near retirement you decrease equities and increase bonds and money markets and other far more stable investments for that exact reason.

[HockeyMom]

20. He has notthing

$50,000 before all the tanking. Between so many job loses where he took it out to live on, plus 40 years ago there weren't 401K's, the point is really moot. He NEEDS Social Security, IF he/me can ever retire.

Our parents with their pensions were so much better off than us. I really worry for our children what their lives will be like.

[Odin2005]

60. You are married to a Wing-Nut? how they hell did this not end in divorce?

:wow:

[The Magistrate]

5. The Market Has Blessed them With Austerity, Sir: Blessed be the Market, Whose Ways Are Righteous...

[kentuck]

6. Ahh-hhh-hhh....the free market?

The god of the Greedy .

[JuniperLea]

7. It's no different than gambling...

It is precisely gambling! Legalized gambling and the brokers are legalized bookies.

[Nye Bevan]

9. You should not wait for one particular day to sell all of your stocks.

As you get closer to retirement you gradually re-weight your portfolio from stocks into more stable investments. All 401k's, for example, offer a stable value fund.

Different professionals have different rules of thumb, but one suggestion is to take 100 minus your age and make that the percentage of your portfolio that is invested in equities.

[BeyondGeography]

10. All businesses try to take in more money than they pay out

That's how I get my head around Wall St. And keep my money to myself.

[OHdem10]

11. How about those 401Ks , Student Loans????

[abelenkpe]

12. It is a casino

And no one has ever managed to explain to me why it is necessary to gamble with ones saving in order to have a chance to retire. I mean what kind of society makes gambling with your savings a prerequisite to not having to work until one dies?

[kentuck]

15. There should be a guarantee from employers that handle 401K's

to their employees, or else go back to regular retirement accounts as before? This seems to be nothing more than a big stack of money for Wall Street to play with?

[dmallind]

18. Employers don't handle 401ks

At least none I've ever come across or seen data on. They allow you to save your money pretax, most will match at least part of that, but what you invest in is up to you.

[abelenkpe]

44. Seems like pensions were a better way to go. nt

[joeglow3]

13. I have had good luck

However, I have been dollar cost averaging into index funds for almost 10 years now. With all the ups and downs, I an still up overall (thanks to small caps and emerging markets).

[dmallind]

21. So are most who get that basic idea

The Dow was 3775 when I started. I bought at that, and I bought at 14000 and will buy at this level, and all points in between. Like most investors I get a match, and like most investors with enough common sense to browse even ONE article on the topic or listen to one seminar or read one prospectus or listen to one radio show or watch one TV show where the topic is discussed even briefly during their working career, I know the three basic things that make these swings less scary.

Diversify investments

Think long term

Reduce equities and increase bonds/stable value funds as you near retirement.

Nobody can pretend they have not heard these truisms. Most of us countless times. They are not complex. They do not require market savvy or higher education or advanced math.

[Dark]

25. Not to mention, a lot of people didn't get back in until this year.

They missed out on the gains, and are taking a beating now.

Of course, this is also why Social security is SO IMPORTANT. A lot of baby boomers are going to rely on it, because their 401ks got wiped out.

The teabaggers don't realize how lucky they are that they didn't succeed in privatizing it.

[TBF]

30. But it is not guaranteed money - you could lose that all in a day.

Don't be silly and try to pretend it's something else.

[dmallind]

36. Lose it all? No I couldn't. Not even most. Some, sure. Where did I imply otherwise?

But unless you posit very unlikely scenarios (all in 2006, all out summer of 08, no match, no change in tax rate, no diversification) it's still true, even today, that sensible long term investors do better with 401ks than alternatives like savings accounts and CDs.

[TBF]

39. It is at your own risk - there is a disclaimer every time you trade

whether on paper or digitally. It is there for a reason.

[dmallind]

50. Of course it is - they can go up and down in value. But losing ALL is impossible.

The way I set up my investments losing most of it is impossible too (barring sci-fi level scenarios that could also apply to cash, or gold, or anything else).

[joeglow3]

42. No I can't

I invest in index funds. If that all goes to zero, my investments will be the least of my concerns.

[Zywiec]

34. +1 These things need to be taught in high school. n/t

[coalition_unwilling]

56. One additional item that may make the swings less scary:

Assess your appetite for 'risk' - how will you feel if you invest $1,000 in stocks and, 12 months later when you check and find your stock is now worth only $800? (A loss of 20%)

[Swede]

23. You actually make money during volatile markets this way.

nt

[spooky3]

35. You've posted that nonsense before and didn't back it up when challenged to show evidence.

Unless you know in advance when the market will advance or lose, which no one knows with any certainty, volatility simply means that you lose one day what you've gained the day before, and vice versa--and, you lose money on transaction costs.

[Swede]

41. Here you go.

https://www.amp.com.au/wps/portal/au/AMPAUGeneralSplash?vigurl=%2Fvgn-ext-templating%2Fv%2Findex.jsp%3Fvgnextoid%3D3e2e3ebcda203210VgnVCM1000001903400aRCRD

[dmallind]

14. If they take it all out in one day - they get 4% less today

Simple enough. Very few are likely to though, just like very few put all their money in on a high day. Anybody using the equities market in an all-in-one-day all-out-one-day manner either doesn't understand the first thing about it or is a day trader playing a game or both.

[Chan790]

24. I did that.

Bought a lot of SBUX years ago at $12.XX all in one bunch because I knew it was undervalued. Held it, rolled the dividends into buying more stock, watched it split, held it some more for several years. Last week I looked and it was high, much higher than I thought it was worth at $41.60...so I sold it all and bought a new computer and some toys and paid my rent, signed-up for some classes in my field and am in the process of living my dream of launching a NPO-focused PR/Comm./Development/Social Media firm after years of working and volunteering for others. I also freelance-write on the side.

You might say I don't understand the first thing about "it", but I'd argue I done good in "it" so I must have understood something. I knew going in that two things are true:

1.) The market always gains in the long-term...if you're in when it crashes, STAY IN!!! It's always up in the long-haul, you might just have to ride it for a long while and not think about the bloodbath you're only taking in your imagination. All gains/losses are non-tangible until you sell, they may as well be imaginary.

2.) Panic-vultures are losers. They see it's down so they sell and only succeed it solidifying their losses.

[dmallind]

37. Suere sounds like you understand it. Ballsier than me though. Well done. nt

[enough]

16. I guess if you find yourself "just getting ready" to get out of the market, you should do it

immediately. Which doesn't help those who didn't do it. Of course with the way the markets are these days, all this could turn around tomorrow.

I agree the thing is a casino; haven't been "in" it for a long time now.

[Swede]

22. Except you leave your money for years,sometimes decades.

If you don't need the money now,leave it in.

[JoePhilly]

26. Are you serious?

First, you only invest the majority of your 401k money in "the MARKET" when your time horizon is longer than a couple years.

Second, if you have the means to invest in a 401k, you often get a company match, AND you get to defer the tax on that income.

And so, a couple that makes enough to fully fun a 401k gets to defer the income tax on about $32,000, a YEAR. And then your company match, goes into that same pool of money.

And then ... yes you can manage your 401k to TIME the market.

But what does that mean?

If you have a longer time horizon, you can SHIFT 401k money such that when the market hits HIGHS, you sell more, and then when it drops, like it did today, you buy more.

Now ... back in 2007, the DOW hit 14,000. That was too high. The run up to that number was way to fast and there was no rational reason for it. The drop in 2008 was a correction, and with some panic, we fell to 6500 ... with the Tea Party nuts predicting a DOW of 2k. I hope those DOPES sold at 6500.

Certainly you can invest in a 401k, and let it run its course. But if you pay even a little attention, you can SHIFT 401k money around so that you buy more when it is DOWN, and you sell more when it us UP.

And if your time horizon is longer, you can be wrong some, and yet still be right.

Let me explain that.

When the Dow fell to 6500, it did not just drop there. When it fell past 10,000, smart inverters started to buy some, and as it fell, they bought more.

But where did they get the money to BUY?

Well ... back in 2007, when the DOW was passing through 12k, then 13k, and then 14k, they were CASHING IN on a regular basis. They were building up CASH positions, so that if the DOW dropped, which it does from time to time, they would have extra cash to buy in because of the gains they took.

The notion of BUY LOW and SELL HIGH is not a new one.

If you have a 401k, and you have a longer time horizon, you can try to time things. But that is only an adder to the other benefits you get.

And then, as you reach the point where you will need 401k money to live, you GET OUT. Each time the market jumps, you sell MORE, and you put that money in very very safe places.

The LAST thing you should do is to suddenly decide you need your 401k money, and see it hit by a quarterly, or even yearly decline.

If this money matters to you, you manage it.

[Dark]

28. All good points, tho I'd start getting out about 10 years before you retire

But there are people here who do not understand these principles and think its just gambling. Educated guessing and timing is more like it.

Most people, however, should have a good financial adviser handle their money, imo.

[JoePhilly]

32. I think 10 years is too early, but won't make a huge issue.

In part because I think you mean that inside 10 years, your diversification will move more and more away from stocks.

And so while I do get that ... if you look at DOW trends, its tough to find a 10 year period in which you lose money in the market.

Having said that, since Bush took office, the market is basically FLAT. Runs in that range I mentioned.

I don't see the DOW crashing to 2k or even spending much time under 10k in the next decade.

But, your point is important ... everyone needs to know their own "risk tolerance". If weekly DOW jumps of 300 points give you a panic attack (regardless of your time horizon), maybe you need a more conservative portfolio.

Nothing wrong with that ... I think many 401k holders do not spend nearly enough time managing them. And yet these are potentially critical parts of their retirement money.

And so, if you don't have the time, willingness, to manage them, then you need to be in VERY VERY safe investments. Small return, and very limited risk.

[Curmudgeoness]

47. You can say 10 years prior to retirement, but

that was my intention. That would have been last year that I would have started moving out. But.....the market was much lower than it had been most of the time I was buying into it, so I would have taken out less than I put into it over the years. I am not willing to do that. They might end up taking the rest of it, but I am going to wait it out now. This is just not a good time to move out of the market when I will not need to use that money for quite a while.

If you ask me if I wish I was out, you would get a resounding yes. But I am hoping that at some point over the next nine years, it will be a better time. Best laid plans....blah blah blah. It figures that last year would have been my ten year window.

[eridani]

49. Buying low and selling high is not possible unless

--a whole bunch of other people are buying high and selling low.

[dmallind]

52. That would be the folks suggesting others get out of the market now

and those who listen to them. There are plenty out there. Every DUdoomer who follows the Kunstlerite Dow 4000 nonsense, and their counterparts on the right, would consider themselves not merely right but lucky to sell in the 10s today. Every polyanna who bought the Dow 36000 line a few years back considered themselves right and lucky to buy at 13500.

I'm not that ambitious and not that certain of wild predictions. Personally most of my investment is simple biweekly dollar cast averaging. But when I do shift money around from cash to equities it's more in the buy below 10 sell above 12 range right now.

[eridani]

53. That doesn't change the fact that to come out on top in trading

--you have to fuck over those at the bottom.

[dmallind]

54. At the bottom of what? They make their own choices and trade willingly

Do you think pension funds don't trade? Union treasurers? Just because a defined pension recipient sees a stable income doesn't mean his fund manager isn't doing the best he can to "fuck over" other willing traders.

[eridani]

55. I see that some have no ethical problems in which some must lose--

--in order for others to win.

[dmallind]

58. They did not lose in their minds, may not even lose in reality

If I buy shares of XYZ at $10 and they go to $15 I have gained, but it doesn't mean the seller, who chose to sell, lost. They may have bought at $5, or bought at $10 and had a few years of dividends. You know that, right?

And I thought every investor was an evil corportatist plutocrat anyway. Aren't I just taking money from them if they did lose?

[eridani]

63. Increase in the value of the stock market over time is based on the premise

--that our human, infrastructural and natural capital are growing over time. That used to be the case, and investment was therefore a win-win. It is no longer the case, which means "winning" is at the expense of a large losing class.

[dmallind]

64. How many examples do you want of stocks trading at their highs right now to refute this?

Who loses who does not choose to sell even in your (false) scenario. Never had to put a gun to anyone's head to make them sell.

[moondust]

27. BIL got screwed.

As I understand it, he planned months ahead to retire on a certain date. That date arrived during the market turmoil of Great Recession I. Couldn't back out of retirement as his replacement had been hired, etc., and apparently got locked into retirement benefits based on the low stock prices.

Edit: "Screwed" is a relative term as it would take a lot of calculation to figure out how much he paid in over time vs. how much he stands to get back in retirement benefits vs. how much he would have gotten back if the market had been way up on his retirement date.

[taught_me_patience]

29. As you approach retirement, you should be allocating more and more to bonds

slowly over time. The notion that you'll invest in equities until the day you retire then cash out all at once is crazy.

[spanone]

31. they should wait a week, could be up another 500, who knows, it's a crapshoot

[DCBob]

33. its a roulette table if an investor tries to buy and sell on peaks and dips..

Long term investors dont care about daily or weekly or monthly gyrations.

[Harmony Blue]

40. While I am a long term stock investor

the vast majority of my investments sit in credit unions.

[aikoaiko]

43. the market is only down 3.5% today and only 15% since its recent high this summer.

No one is busted. Its not gambling.

[Harmony Blue]

45. Only? This should not be a common occurence

I think I will leave it at that. Yes CNBC is overhyping the situation with special coverage tonight "Markets in Turmoil" but it still stings anyway you slice it.

[aikoaiko]

48. Sure, I don't like it either but diversification helps mitigate the sting

[Auntie Bush]

46. self delete

[SmileyRose]

51. Everything in wall street is in favor of the institutional investors.

You don't stand a chance

[Rex]

57. Supposedly based on probability, better luck in Vegas.

Good house odds.

[Odin2005]

59. Small investors are suckers that are robbed by the big guys shorting stocks.

I will never invest money in the stock market ever. It's a scam that makes the Big Investors richer and you poorer.

[raouldukelives]

61. At least with gambling

Your only making money off others gambling losses. With the stock market your profiting from the bombing of families, child labor, destruction of the environment, prisons etc. If it's a horrible industry that your dead set against it's probably part of your 401k.

[saras]

62. And remember, you're supporting whoever you invest in

Don't like what multinationals are doing as far as resource extraction? Good luck keeping your investments out of their hands, and good luck pleading innocence when you're asked whether you helped pay for the destruction or not. And that money is going to have a hell of a lot more powerful of an effect than any political action you do with your life if you're anything less than a Senator or diplomat.

So it's more like gambling during Prohibition, where your gambling losses were going to fund the Mob and all their activities.