Comments on: Market Timing With My 401k…Why I Do It. http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/ A blog about everything, mostly about personal finance. Wed, 18 Jan 2012 02:44:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Brendan http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-6793 Brendan Tue, 21 Nov 2006 01:42:07 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-6793 I've often used the strategy of watching for major companies that have dipped recently. They are likely to return to normal soon so they are often a good buy. of course there is always the occsional Enron or Worldcom, so it's not quite a safe form on investing. I’ve often used the strategy of watching for major companies that have dipped recently. They are likely to return to normal soon so they are often a good buy. of course there is always the occsional Enron or Worldcom, so it’s not quite a safe form on investing.

]]> By: freedumb http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2868 freedumb Wed, 04 Oct 2006 19:52:08 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2868 Oh that's a good point...1% could be significant! Thanks Enough Wealth! Oh that’s a good point…1% could be significant! Thanks Enough Wealth!

]]> By: Enough Wealth http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2859 Enough Wealth Wed, 04 Oct 2006 14:52:38 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2859 Me again ;) I must admit even I "re-allocated" my retirement funds to be weighted a bit more into property when the Oz sharemarket was dropping in 2001, and then went back to my more stock-centric weighting in 2003, just in time to benefit from a big bull run. (My long-term allocation in my retirement account is 45% AU-shares, 45% International (mainly US) shares, and 10% property funds). But I still think I shouldn't do it, and that I'm as likely to underperform than outperform by doing so... It's just soooo hard to resist. One other point - my superannuation (retirement) account also allows you "free" switches between the various fund options. BUT don't forget that there's usually a buy-sell spread in the unit prices which costs you a bit each time you do a switch. It's not material as a "one-off" expense, but, in the long run, doing several reallocations a year over 20+ years would impact your annual return by 1% or so (out of, say, a 10% total return) - which will have a big effect on your final balance. Regards http://enoughwealth.blogspot.com Me again ;)

I must admit even I “re-allocated” my retirement funds to be weighted a bit more into property when the Oz sharemarket was dropping in 2001, and then went back to my more stock-centric weighting in 2003, just in time to benefit from a big bull run. (My long-term allocation in my retirement account is 45% AU-shares, 45% International (mainly US) shares, and 10% property funds).

But I still think I shouldn’t do it, and that I’m as likely to underperform than outperform by doing so… It’s just soooo hard to resist.

One other point – my superannuation (retirement) account also allows you “free” switches between the various fund options. BUT don’t forget that there’s usually a buy-sell spread in the unit prices which costs you a bit each time you do a switch. It’s not material as a “one-off” expense, but, in the long run, doing several reallocations a year over 20+ years would impact your annual return by 1% or so (out of, say, a 10% total return) – which will have a big effect on your final balance.

Regards
http://enoughwealth.blogspot.com

]]> By: freedumb http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2849 freedumb Wed, 04 Oct 2006 07:57:02 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2849 Hazzard, I hear ya! I've had many episodes of that...I need a crystal ball. LMG, I do invest on gut a lot...depending on how the outlook on economy, world news, etc is. The good thing about my 401k is that I can only moves funds between various funds, so I'm not really "market timing" like with individual stocks. I'm not going to take the huge hits I might take with individual stocks. D, I generally err on the side of caution...I don't think moving my money to an aggressive fund is that dangerous...it's not a single stock, so it may go down, but not 50%...Hopefully. That I don't think I could handle. Hazzard, I hear ya! I’ve had many episodes of that…I need a crystal ball.

LMG, I do invest on gut a lot…depending on how the outlook on economy, world news, etc is. The good thing about my 401k is that I can only moves funds between various funds, so I’m not really “market timing” like with individual stocks. I’m not going to take the huge hits I might take with individual stocks.

D, I generally err on the side of caution…I don’t think moving my money to an aggressive fund is that dangerous…it’s not a single stock, so it may go down, but not 50%…Hopefully. That I don’t think I could handle.

]]> By: D http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2840 D Wed, 04 Oct 2006 02:31:57 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2840 Now you know..I wouldn't want to tell you what to do, but....ha ha.. so funny aren't I, since you asked. I do not trust myself enough to try and time the market. Although in my own little ways I do the same thing. When I see a stock go down below my average price, I will kick in a couple dollars. I say a couple, cause that is all I have. Do what is best for you. I think you err on the side of caution, so I don't think you will do anything crazy. Go for it and make your money work for you. No one loves your money more than you! You will do the right thing, and if not...learn from it and move on. It's only money. Now you know..I wouldn’t want to tell you what to do, but….ha ha.. so funny aren’t I, since you asked.

I do not trust myself enough to try and time the market. Although in my own little ways I do the same thing. When I see a stock go down below my average price, I will kick in a couple dollars. I say a couple, cause that is all I have.

Do what is best for you. I think you err on the side of caution, so I don’t think you will do anything crazy. Go for it and make your money work for you. No one loves your money more than you! You will do the right thing, and if not…learn from it and move on. It’s only money.

]]> By: LAMoneyGuy http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2827 LAMoneyGuy Tue, 03 Oct 2006 21:11:26 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2827 Well, the potential danger in timing the market is much less in the fees and transaction costs, as it is simply getting it wrong. Sell at the bottom and buy at the top once or twice and you have a lot of ground to make up. However, as you may remember from a couple of my posts about market timing, you don't have to be perfect for there to be benefit. I guess the biggest consideration in any market timing system would be, what is your criteria to buy or sell? Without objective criteria, you are going with "your gut." I would be a little wary about that. Well, the potential danger in timing the market is much less in the fees and transaction costs, as it is simply getting it wrong. Sell at the bottom and buy at the top once or twice and you have a lot of ground to make up.

However, as you may remember from a couple of my posts about market timing, you don’t have to be perfect for there to be benefit.

I guess the biggest consideration in any market timing system would be, what is your criteria to buy or sell? Without objective criteria, you are going with “your gut.” I would be a little wary about that.

]]> By: Hazzard http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/comment-page-1/#comment-2819 Hazzard Tue, 03 Oct 2006 17:53:25 +0000 http://www.financialfreedumb.com/2006/10/03/market-timing-with-my-401kwhy-i-do-it/#comment-2819 I think that timing can be a legitimate approach if you are cautious and don't try to do it too often. I did a bit of market timing during the crash after 9/11 and have faired quite well with those trades. My only regret is that I didn't leave the trades alone long enough after that. I could have made a lot more than I did!! I think that timing can be a legitimate approach if you are cautious and don’t try to do it too often. I did a bit of market timing during the crash after 9/11 and have faired quite well with those trades. My only regret is that I didn’t leave the trades alone long enough after that. I could have made a lot more than I did!!

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