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Adjusting 401k to better weather market downturn

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    #16
    Originally posted by disneysteve View Post
    I agree with everyone else.

    1. Market timing doesn't work.
    2. Your friends are wrong.
    3. You are 40 and have 20+ years until retirement. Stay the course. Your current allocation is a good one but if you want to tweak it to be a tad less aggressive I wouldn't argue with that.
    4. Target funds with Vanguard are good options and have low expenses.
    5. Kudos for you for asking the questions and taking the time to learn more about your options.
    This. It's captured in another thread on this board, but if 2020 taught us anything (besides the importance of wearing a mask and social distancing) it was to stick with the plan. Most on this board rode out the market lows in March and by the end of the year had very positive portfolio returns.

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      #17
      Originally posted by srblanco7 View Post

      Most on this board rode out the market lows in March and by the end of the year had very positive portfolio returns.
      Not only did I ride out the lows, I saw them as an opportunity to invest more. A couple of the purchases I made at that point have since doubled in value.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

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        #18
        Vanguard's target funds are a great option, I think, especially for someone who has their hands full with toddlers and work and doesn't want to think about rebalancing, etc. Agree with everyone else, your friend is wrong. No one can time the market, not even the people who do it for a living.

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          #19
          Originally posted by disneysteve View Post

          Not only did I ride out the lows, I saw them as an opportunity to invest more. A couple of the purchases I made at that point have since doubled in value.
          Definitely more than a few of us on this forum took advantage for timing. While bjl is correct that the average investor (myself) can't time the market, we definitely capitalized on some opportunities in hindsight. No regrets during that window.
          "I'd buy that for a dollar!"

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            #20
            Originally posted by cypher1 View Post

            Definitely more than a few of us on this forum took advantage for timing. While bjl is correct that the average investor (myself) can't time the market, we definitely capitalized on some opportunities in hindsight. No regrets during that window.
            I think there's a distinct difference between market timing and acting on opportunities. Selling all of your stocks because you think the market is "due for a crash" is market timing. Snatching up shares of companies whose prices have been driven down by a pandemic but are still fundamentally solid and will recover is smart investing.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

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              #21
              Originally posted by disneysteve View Post

              I think there's a distinct difference between market timing and acting on opportunities. Selling all of your stocks because you think the market is "due for a crash" is market timing. Snatching up shares of companies whose prices have been driven down by a pandemic but are still fundamentally solid and will recover is smart investing.
              Agree. We did put some sideline cash to work during the March drop.

              Noting also that our plan has evolved with time, We started with a focus on getting to the milestone of regularly maxing out our 401ks and Roth IRAs. Then we added 529 plans and a brokerage account. And now, while we continue to max our 401ks and Roth IRAs, we’re rebuilding a cash cushion as we approach (our likely) early retirement.

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