I'm ready to move my $ out of the stock market. Can you help me pick a fund?

[Atretes1]

I've been wanting to bolster my taxable account. I've been buying 40 shares of VTI but every time I do it drops again. LOL. I will continue to buy it down until I run out of money that I am willing to spend.

[Fishindude77]

Ua_guy, you can't time the market, so you might as well as well own as many shares as of good companies as you can. Prices go up, they go down. But in the long run, if the company is making money, it will be valuable.

This is my opinion as well.
Tesla keeps getting mentioned here. Personally, I would not consider this an attractive long term stock. The new administration is going to stop shoving EV's down our throats so the artificial market for these will likely flatten and level out to represent the true demand for EV's which is just a small portion of the auto market.

[ua_guy]

This is my opinion as well.
Tesla keeps getting mentioned here. Personally, I would not consider this an attractive long term stock. The new administration is going to stop shoving EV's down our throats so the artificial market for these will likely flatten and level out to represent the true demand for EV's which is just a small portion of the auto market.

Did you see the president bought a Tesla off the White House lawn yesterday in an attempt to boost TSLA and was telling everyone how great Teslas are and what a good American Musk is? I wonder how much that will help?



Oh, not bad, not bad...

[ua_guy]

I did look into Vanguard's Target Date 2030 fund. It's still 60% stock and 40% bonds, split almost evenly between domestic and foreign. I would have expected it to be invested more conservatively, so I think if I'm going to lock in a loss, it won't be there.

[disneysteve]

I did look into Vanguard's Target Date 2030 fund. It's still 60% stock and 40% bonds, split almost evenly between domestic and foreign. I would have expected it to be invested more conservatively, so I think if I'm going to lock in a loss, it won't be there.

Why would you expect it to be more conservative? 60/40 is a pretty standard allocation for retirees and certainly for near-retirees. If you are retiring at 60-65, you've got to be planning for a 30-year retirement which means keeping a substantial stake in equities to stay ahead of inflation. I retired last year at 59 and we're maintaining a 60/40 portfolio.

[ua_guy]

Why would you expect it to be more conservative? 60/40 is a pretty standard allocation for retirees and certainly for near-retirees. If you are retiring at 60-65, you've got to be planning for a 30-year retirement which means keeping a substantial stake in equities to stay ahead of inflation. I retired last year at 59 and we're maintaining a 60/40 portfolio.

To be honest, I haven't ever considered investing conservatively so I really don't know/understand the asset mixes or allocations. I would assume bonds, annuities, treasury bills. During the recession, I had little to lose, but I had time on my side. Leading into Covid, I was more incentivized to side-step, but bet on politics to carry us through. Given the stock market performance over the last couple of years, I was right.

I'm strongly considering trusting my intuition again and pulling a significant amount out of stock. I wouldn't have said so a month ago. It's the last two weeks, my sentiment has changed considerably. I see the present as a period of slack-water before Q1 earnings are announced and before employment data containing all the recent layoffs starts to pull down numbers. As much as I have relied on not timing the market, I feel like now is the time to panic. Not just emotion, I actually see things grinding to a halt.

As far as the target fund for 2030 or 2025, I would have guessed an asset mix more like 40% or less stock, not 60%.

I think 60%, for example, speaks to the performant nature of the broader stock market over time, and right or wrong - affording it a high level of trust based on past performance. I think it also speaks to the growing self-funded retirement reality that many of us face, and needing higher rates of return on our own contributions in order to not come up short of our retirement aspirations.

While I understand the need to still grow retirement funds leading up to and during retirement, I don't know a 30% drop in the market would affect the masses. For many I think it would delay retirement or put goals in jeopardy, and 60% stocks feels (that's emotion) like too much risk given the current climate.

[disneysteve]

Right now, at 2:30pm on 3/12/25, our 60/40 portfolio is down 1.5% from 12/31/24. Will it drop farther? Probably so. But the benefit of a balanced and well-diversified portfolio is that it is buffered from the pure market returns. I'm certainly not going to panic about a 1.5% decline.

If the market drops 30%, that equates to a more modest (though obviously still significant) 18% drop for our portfolio (30% of the 60%). It's not as dramatic as it sounds.

Staying invested in stocks for the long term is critically important to financial success. Of course, you also need to be able to sleep at night. Market corrections, which are entirely normal, often reveal people's risk tolerance to be a lot lower than they thought it was, and that's okay too.

Also keep in mind that the past 2 years were historically atypical and skewed people's outlook. The 2023-2024 market returns were the best since 1978, I think. Having 2 consecutive years with 20+% returns is highly unusual and far greater than the long term averages. We had to revert to the mean at some point.

[ua_guy]

Right now, at 2:30pm on 3/12/25, our 60/40 portfolio is down 1.5% from 12/31/24. Will it drop farther? Probably so. But the benefit of a balanced and well-diversified portfolio is that it is buffered from the pure market returns. I'm certainly not going to panic about a 1.5% decline.

If the market drops 30%, that equates to a more modest (though obviously still significant) 18% drop for our portfolio (30% of the 60%). It's not as dramatic as it sounds.

Staying invested in stocks for the long term is critically important to financial success. Of course, you also need to be able to sleep at night. Market corrections, which are entirely normal, often reveal people's risk tolerance to be a lot lower than they thought it was, and that's okay too.

Also keep in mind that the past 2 years were historically atypical and skewed people's outlook. The 2023-2024 market returns were the best since 1978, I think. Having 2 consecutive years with 20+% returns is highly unusual and far greater than the long term averages. We had to revert to the mean at some point.

You are right about the long term and needing to be invested in stocks. And that the last two years were an anomaly. But I don't want to give those gains back.

Perhaps only making 4% during sleepless nights for a while isn't so bad. A bond fund or a 4% FDIC insured CD feels like a decent place to park things.

As they say on Shark Tank, "I'm out!"

Orders to sell are placed and I'll figure out where it's going next, tomorrow.

[QuarterMillionMan]

The way I see it is to take some profits off the table, if I were in stocks. Why ride the roller coaster down, then back up again. Jump off for now and take profits. Jump back in when you the low water mark and low tide comes back.

[disneysteve]

Perhaps only making 4% during sleepless nights for a while isn't so bad. A bond fund or a 4% FDIC insured CD feels like a decent place to park things.

Keep in mind that bond funds can and do lose value, as many painfully learned in 2022. If your concern is preserving principal, stick with individual Treasuries, held to maturity.

[disneysteve]

The way I see it is to take some profits off the table, if I were in stocks. Why ride the roller coaster down, then back up again. Jump off for now and take profits. Jump back in when you the low water mark and low tide comes back.

That's the definition of market timing and it never works. You simply don't know when the market has peaked and you don't know when it has hit bottom. By missing just a handful of the best trading days, you lose out on a huge percentage of the gains. There are endless studies and charts documenting this.

If you are still working and still regularly contributing to a 401k/403b/IRA/taxable account, market corrections are buying opportunities. It's just plain stupid to say, "I'm not going to buy this investment at a 20% discount. I'd rather wait until the price goes back up and then I'll buy it." That's what you are suggesting here. How many people got out of their stocks a year or two ago because they thought the market couldn't go any higher only to see it gain 24% last year and 23% the year before (or close to that - I don't remember the exact numbers)?

[ua_guy]

Keep in mind that bond funds can and do lose value, as many painfully learned in 2022. If your concern is preserving principal, stick with individual Treasuries, held to maturity.

I'm fixated on CD's above 4% which are non-callable and are FDIC insured. I think that is my primary reason for avoiding bonds is that I'm not totally certain those are great. I think a CD would buy time, and if the bank folds at least there's some chance of recovering my money?

I guess, why not a CD? Or, why an individual treasury instead?

[Fishindude77]

Right now, at 2:30pm on 3/12/25, our 60/40 portfolio is down 1.5% from 12/31/24. Will it drop farther? Probably so. But the benefit of a balanced and well-diversified portfolio is that it is buffered from the pure market returns. I'm certainly not going to panic about a 1.5% decline.

If the market drops 30%, that equates to a more modest (though obviously still significant) 18% drop for our portfolio (30% of the 60%). It's not as dramatic as it sounds.

Staying invested in stocks for the long term is critically important to financial success. Of course, you also need to be able to sleep at night. Market corrections, which are entirely normal, often reveal people's risk tolerance to be a lot lower than they thought it was, and that's okay too.

Also keep in mind that the past 2 years were historically atypical and skewed people's outlook. The 2023-2024 market returns were the best since 1978, I think. Having 2 consecutive years with 20+% returns is highly unusual and far greater than the long term averages. We had to revert to the mean at some point.

This pretty much replicates my thoughts on this topic.

[Petunia 100]

The way I see it is to take some profits off the table, if I were in stocks. Why ride the roller coaster down, then back up again. Jump off for now and take profits. Jump back in when you the low water mark and low tide comes back.

It's really easy to look back and identify those low and high points; it's not as easy to identify them when looking ahead.

[disneysteve]

I'm fixated on CD's above 4% which are non-callable and are FDIC insured. I think that is my primary reason for avoiding bonds is that I'm not totally certain those are great. I think a CD would buy time, and if the bank folds at least there's some chance of recovering my money?

I guess, why not a CD? Or, why an individual treasury instead?

Oh, I wasn't suggesting Treasuries instead of CDs. I was suggesting them instead of bond funds. I'm totally fine with CDs. We own a bunch of CDs. We own a bunch of Treasuries. Whenever I'm making a purchase because something has matured, I look at both for the duration that I want and pick the best deal.