Got Me Thinking ......

[ProduceMan]

http://www.marketwatch.com/story/bounce ... 2020-10-19

Do I continue to be aggressive or do I put some aside and wait for that rainy day.....

[bloobs]

http://www.marketwatch.com/story/bounce ... 2020-10-19

Do I continue to be aggressive or do I put some aside and wait for that rainy day.....

Simple answer: Yes.

Elaborated answer: you can be both aggressively invested while also holding cash.

There are no absolute outcomes in life (only death is absolute). No event can be assigned a 0% or 100% probability; it is always somewhere in the middle. So never be completely invested nor be waiting for a big fall at any time.

[jimcasada]

I was working at Kwikset Locks in Bristow OK back then. Our 401k was set up so that you could only make a fund change at the end of a quarter (only 4 EFT's/year max). If I remember correctly, we only had 4 fund choices: Fortune 500, Small Caps, International, and the Fixed Rate Fund (which paid a flat 5%/yr back then). I distinctly remember looking at my monthly statement in August of '87, which showed that I was up 38% ytd, and thinking to myself how crazy high that was and how this couldn't keep going up like that. So, I switch everything to the Fixed Rate fund effective Oct 1st.

Then came the crash a couple weeks later and all the other funds dropped about 1/3 of their value. Almost everyone else at work still seemed to be in at least one of those stock equity funds. There were some folks brought to tears and going home sick that day. It was a very sad day for a lot of people, but I switched back a 3 way split on our stock funds effective 1Jan1988 and enjoyed a nice rebound over the next few quarters.

Although nobody really ever expected a crash like that one in 1987, the lesson I learned that day was just don't be greedy. Once again, all the markets seem pretty inflated to me right now. That's why I'm in -G- fund right now. So I'm only up 13% this year. Better to be safe than sorry.