401K thoughts?

[herofan]

In 2000 the market tanked. And all the signs were there to know it was going to take a dive. I worked with guys that stayed in and they lost their asses short term but made it back on the rebound. No harm, no foul, and they did just fine.
On the other hand I sold everything in April before the market took the plunge and hoarded my cash. I didn't take the hit that the "buy and hold" guys took. When I saw the market had hit bottom I bought back in for pre-downturn dollars at bottom-of-the-barrel prices.
Every financial advisor you ask will discourage this... because the big investment firms advise their advisors to sell buy and hold as a viable strategy. Warren Buffet advises it. I often think they use average investors to stabilize the market so they have a dependable playing field.
But the people that lose their asses sell after the stock tanks and then rebuy when it has risen. People that buy before the drop and rebuy at the bottom make much better returns than people that buy and hold.
Do you think Buffet is buying and holding? If he is... then why are you not getting the same results as he is getting?
I don't sit and study the market every day to find the best options... but I've made buys that returned 8 times investment in less than two weeks. Timing the market does not necessarily mean you are uninvested. It can mean you are invested and waiting in something safe until an opportunity arises where the risk is justified by the potential return.

What you just described is the winning strategy. I never understood people who sell when things tank and then buy back when things go up. Right now is the time to buy, but some look at you like you've lost your mind if you say that.

 

[shaz]

What you just described is the winning strategy. I never understood people who sell when things tank and then buy back when things go up. Right now is the time to buy, but some look at you like you've lost your mind if you say that.

So you feel like the market has bottomed?

 

[herofan]

So you feel like the market has bottomed?

I couldn't say for sure, but I'm comfortable making purchases right now.

 

[shaz]

I couldn't say for sure, but I'm comfortable making purchases right now.

We're almost certainly looking at a slew of bad news coming up. Risky I would say

 

[herofan]

We're almost certainly looking at a slew of bad news coming up. Risky I would say

I'm certainly no expert and in no position to be advising other people. I'm sure it depends on the company, but if I invest in solid companies now, I have confidence that it will be looking much better in a few years.

 

[Davemk]

What you just described is the winning strategy. I never understood people who sell when things tank and then buy back when things go up. Right now is the time to buy, but some look at you like you've lost your mind if you say that.

There are very few people in this world that are able to time the market as you are suggesting.