Who Else is in the 401K Blackhole?

[GrimJack]

I have been investing in my TSP for about 5 years; this last year it is up 10% (over the 5 categories). Over the last 5 years the worst category was down -3.38% and the best category was up 38.35%; I really must start stuffing more than 15% of my pay into the TSP.

[Zedon]

That's the quirkiness of the market, it takes a year to go up 15% then you lose 10% in 3 days. It sucks but that's the way it is. Unfortunately people don't trade on facts or even relevant facts all the time so you just have to weather these storms. You can try to time it but you'll probably end up worse than just leaving it in.

[Randomsaver]

I scoured away from the blackhole yesterday. Sold everything.

I'd probably let a week pass and then decide to go back.

[Like2Plan]

I'm in. Sadly.

Lost a total $1400 (basically a balance drop of $700 on top of an infusion of $700 from contributions) from July 6 to today's date.

I scoured away from the blackhole yesterday. Sold everything.

I'd probably let a week pass and then decide to go back.

If this is your reaction to changes in the market, I would say that you have the wrong asset allocation. That might be a good place to do further research--find an asset allocation with which you are comfortable. I don't know who to attribute this quote to, but I think this might be something worth thinking about--it's not market timing, but time in the market... Unless you have psychic intuition, it is not a good idea to chase returns.

[disneysteve]

I scoured away from the blackhole yesterday. Sold everything.

I'd probably let a week pass and then decide to go back.

What do you hope to accomplish by selling and rebuying a week later? I can't think of any possible benefit to doing that. Sure, you might get lucky and buy in at a lower price but the odds are just as good that prices could go up and you'll have missed out on that gain.

[corn18]

To the OP, I'm guessing you missed out on the nice recovery that happened immediately after the black hole? I lost $5K after the first drop and now I have that back and another $5k. So I feel sorry for anyone who cashed out during the "dip".

Don't sell the dip, buy the dip. Much more fun.

Tom

[Zedon]

To the OP, I'm guessing you missed out on the nice recovery that happened immediately after the black hole? I lost $5K after the first drop and now I have that back and another $5k. So I feel sorry for anyone who cashed out during the "dip".

Don't sell the dip, buy the dip. Much more fun.

Tom

I agree, if you are long term, you buy on the dips and let it ride until you need to re-position. going in and out will just leave you missing out.

[disneysteve]

I agree, if you are long term,

And if you aren't in it for the long term, you shouldn't be invested in stocks.

[bigdaddybus]

And if you aren't in it for the long term, you shouldn't be invested in stocks.

Wrong!

I love being in stocks for the short term. Bought FB at $25 and sold for $71 in 18 months. Bought WFC for $7.50 and sold for 16 bucks 18 hours later in 2008.

If your not going to spend the time learning the fundamentals stick with funds. Nothing wrong with stocks if your willing to put in the time to study the companies financials.

[disneysteve]

Wrong!

I love being in stocks for the short term. Bought FB at $25 and sold for $71 in 18 months. Bought WFC for $7.50 and sold for 16 bucks 18 hours later in 2008.

If your not going to spend the time learning the fundamentals stick with funds. Nothing wrong with stocks if your willing to put in the time to study the companies financials.

Okay, but let's distinguish between investing and trading. They aren't the same thing. I've done some trading myself over the years so I'm not at all opposed to doing it but I would never confuse it with my long term investing plan.

Someone who is spooked by a drop in the market and reacts by selling off all of the stock in his 401k is entirely different than someone who is intentionally buying and selling stocks over a short time span.

[bjl584]

To answer the OP, I looked at my balance this morning. It's the highest that it's ever been.

[JoeP]

To answer the OP, I looked at my balance this morning. It's the highest that it's ever been.

You can thank, in part, all those who panicked and sold low.

[corn18]

Wrong!

I love being in stocks for the short term. Bought FB at $25 and sold for $71 in 18 months. Bought WFC for $7.50 and sold for 16 bucks 18 hours later in 2008.

If your not going to spend the time learning the fundamentals stick with funds. Nothing wrong with stocks if your willing to put in the time to study the companies financials.

I enjoy trading and I especially enjoy trading when I am right. But there are times when I am wrong. And for no real reason. All the data indicate a rise or fall in a stock's price would be the predicted response, yet it does exactly the opposite. I have been wrong as much as I have been right and I don't trade large sums so I haven't lost or gained a lot by trading. But I enjoy it because I get the exact same rush I get when I sit down at the blackjack table.

My unmanaged long term accounts do much better from an absolute dollar value gained and from a percentage increase than my stock picking. That indicates I suck at trading but at least I know that and let my investments grow without my "help".

Tom

[feh]

I scoured away from the blackhole yesterday. Sold everything.

I'd probably let a week pass and then decide to go back.

Holy cow. This is a very troubling statement.

You need to decide what your risk tolerance is...perhaps investing is not for you.

Please read this: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

[bigdaddybus]

I enjoy trading and I especially enjoy trading when I am right. But there are times when I am wrong. And for no real reason. All the data indicate a rise or fall in a stock's price would be the predicted response, yet it does exactly the opposite. I have been wrong as much as I have been right and I don't trade large sums so I haven't lost or gained a lot by trading. But I enjoy it because I get the exact same rush I get when I sit down at the blackjack table.

My unmanaged long term accounts do much better from an absolute dollar value gained and from a percentage increase than my stock picking. That indicates I suck at trading but at least I know that and let my investments grow without my "help".

Tom

I hear you. The BP oil spill was the largest investing lesson in my life as I was totally unable to estimate the fall in BP's stock price based on public perception. Long term I would have made a ton of money if I had the stomach to hold what I purchased for several years, but I sold when I could no longer take the pain and invested in other stocks. In the long run I made back my losses and then some.

I like to follow what Jim Cramer says in several of his books "I dont have to be right all the time, I just have to be right more than I am wrong".

I am exactly the opposite as your results. My managed accounts have been growing 25% faster than my unmanaged accounts since 2008. But that includes some big losses that have been offset by even bigger gains.

Interesting you use the blackjack analogy. I dont gamble in casinos, but I hear alot of people consider active investing as gambling. Now options, when I use them, feel alot like gambling.

There is likely alot in common between you, DS, and I. All making more than 95-99% percent of people out there, all extremely likely to have very very comfortable retirements, just different approaches to get there. I enjoy learning about others investing/saving experience.