For those of you with a 401k, where are you allocating it for the bubble pop that's coming? Mine isn't much yet but I'd like to not lose 80% of its value if I can avoid it. Can I put it into gold lol?
Just leave it in index funds. If you only bought in the day before the biggest crashes of the last 2 decades, you would still be well back into the black by now. There are three scenarios where this doesn't work:
- You suddenly need the money short term in the middle of a crash. In this scenario, you take a loss, but unless you're withdrawing all of it, it won't hurt you that much.
- The apocalypse has happened and money has no value. In this scenario, this is probably the least of your problems.
- Capitalism is over and money has no value. In this scenario, you only have to celebrate.
Sometimes I feel bad about it but I made a good chunk of change by predicting the crash of the Turkish Lira due to Erdogan’s incompetence and refusal to listen to his advisors.
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For context, I predicted it in early 2021.
Zero change. The upcoming bubble pop has been predicted every year for your entire lifetime.
There are people who would stand to loose more than you'll ever earn, that's enough for me to trust my investment.
The wealthiest among those people are reportedly divesting stocks en masse, doesn't that concern you? If not, why? (Genuine question, I'm still learning and appreciate all the insight from more experienced people.)
The chances of me personally timing the market are way lower than my chances of being able to ride out a potential crash.
It's a 401k, so it's a long term investment. You shouldn't worry about what happens short term. Just set automatic contributions into low fee index funds from your paycheck. Do not sell during drops. Corrections happen.
Maybe put some more of your allocation into bonds or cash like that other guy said, but I'd just leave it alone and not look at it. Don't expect a crash. Conditions have been worsening for decades, and for the most part the stock market has been on a tear. Fully expect it to continue being on a tear as conditions worsen until it can't. If there's a crash the govt will quickly bail-out the market because too many rich people from around the world use US public markets to hold their wealth. The govt will prop it up until the govt dead and in the ground. Once that happens, who knows if anyone is "retiring". Don't invest in gold. Especially not when everyone is scared.
I would either
A) ignore it B) increase your allocation of bonds and cash now and buy more stocks during the crash.
But the obvious caveat is you cant really know when or how the crash will happen. Nvidia could still triple beforehand.
Personally we are just keeping it all as is. Retirement is far enough away for us. If the crash is 1929 or worse then you are fucked either way
I have always been very conservative with my employer matched retirement account. I have never minded losing out on the opportunity for gains, because I figure I'm already "up" by virtue of the vested employer match anyway. I only play aggressive/tight in no-stakes games. gambling with money makes me feel ill.
the way I see it, those securities gains I am missing out on are generally stolen surplus value from workers anyway, convoluted through buybacks or squeezed borrowers. money doesn't grow itself without labor.
I read some article maybe 7 years ago about the exposure and risk of a looming carbon bubble on a huge amount of securities, and that made me even less psychologically tolerant to risk.
so like ~80% of my shit is in money markets and the rest is in an index. but I used to be "[70-(my age)%]" in an index, the difference in bonds in my slightly less conservative days.
I am also planning on getting screwed out of it somehow anyway and will be pleasantly surprised if I get to have it at retirement.
I'm really into gardening, lentils and rice anyway, so fuck it. also, I'm old lol. but I've been old since I was young when it comes to money.
one of my grandparents lives through the depression in rural Georgia and told me that I was a "tightwad" when it came to spending money on myself. it wasn't intended as a compliment, but I took it as one. she was ballin' though, collecting on multiple old school, public pensions from outliving spouses. that isn't in my future.
don't time the market. i thought it was gonna crash in 2015/2016 and invested super conservatively from then to like 2022; missed out on like multiple insane 20% gains YoY.
Definitely not trying to time the market, just trying to diversify with (relatively) more stable investments. I'm not draining my 401k and buying gold bars or anything.
Your post is literally asking if you can time the market and put it in gold lol
i put like 80% into bonds and made only like 5% over that 6 year span. I'd be up like 100% if i just did stocks.
I have had everything in stocks from the start but thinking of putting some portion into something less volatile.
I'm not touching the retirement funds. If I'm fucked, I figure everybody else will be too.
But, that money doesn't seem real to me anyway. I genuinely don't think I'll see a dime of it. Societal collapse, climate disaster, or me just fucking dying all feel vastly more probable than just enjoying a comfy retirement with whatever nest egg I've cobbled together.
The way I see it it's either total collapse or I can maybe buy a house after the crash. If I had any money in 2008 I could have a paid off house by now but nope, I was working minimum wage and barely scraping by.
If you don't need to retire soon, aren't trying to scalp, and assume that the coming crash isn't going to be The Big One, holding is typically the best strategy.
Take a look at Fidelity's FCNTX:
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In '08, it dropped from ~7.50 to a low of 4.50 (ouch) and was back to where it started by 2011 and kept going up from there. Does the opportunity cost suck? Sure does, but timing the market is difficult and you don't know when the reversal is coming.
If you wanted to try, maybe put some of your stuff in a cash account and start scaling in once the Jim Kramers of the world start jumping out of buildings. You'll at least earn ~4% in the meantime.
Or allocate some to dividend-earning funds and don't reinvest your dividends.
As an alternative to directly buying into precious metals, there are precious metal mutual funds out there. Some just hold actual gold bullion and other metals, some have investments into mining companies, some mix the two, but overall the upsides and risks are similar to directly buying metals without the hassle of renting a safety deposit box. Which, despite the memes, isn’t a bad hedge if you suspect a market downturn approaching (the key being approaching; you’ve missed the boat if you dump into gold after the crash happens).
I am curious though, when do you think the bubble is gonna burst? I figured Mr. Market will have an irrational exuberance for having Team Elephant in charge that will float the bubble for a couple more years and the crash will hit early 2028.
And to make matters worse, liquidating a 401K earlier usually incurs a 10% penalty. To whom such a penalty is paid, I have no idea. But I presume the penalty policy is set in order to disincentivize us peasants from betting on market downturns all the time, because the market would have to lose a lot more than 10% of its total value and you have to time it right to buy back in in order to make it worthwhile.
