Source
r/StockMarket•
ajfa

I sold out. What should I do?

Made the mistake of disregarding every financial adviser's advice, and sold most of my 401k and Roth when the s&p was down 25%. It then dipped down to 30% but now it's back up.

What should I do? I feel like I'm going to be screwed either way.

Some better advice than "I told you so" would be helpful. Thank you.

Edit / update: Thank you all for your advice (the downvotes don't help too much, but I guess I deserve it?)

More information: I have about 25 years until retirement. ~140k in assets (divorce... don't ask...). Currently 70% in bonds/money market, 10% bought back into the S&P 500 mutual fund, and 20% in a target date 2045 mutual fund.

To clarify, I didn't take cash out of my 401k or Roth, I just sold equities-heavy mutual funds (like S&P 500 index funds, or target-date funds) and moved into Treasury bond funds.

My current plan is to wait until the next batch of earnings reports comes out, and see how the market reacts then. My theory is that at some point people will get used to the Fed handing out money, and they'll have to evaluate businesses on their own merits, and not like what they see coming in the next year.

I don't have a financial advisor. Reddit is my financial advisor.

Posted Apr 10, 2020, 2:43 PM UTC · edited

138
onesagestudent•

Listen to your financial advisor next time. I would average back in over the next few weeks/months. How much did you take out?

9
questnnansr•

The market will head down again I’m expecting another drop of some sort next week. Reality has to catch up to the market after some of these earnings reports

2†
onesagestudent•

This is why I say average in. I think your right but timing it is difficult. By averaging in over time you reduce the risk of buying at the high and missing the lows.

7
questnnansr•

I definitely agree. Just saying OP shouldn’t feel like all is lost.

4
ajfaOP•

I've noticed people saying the market will head down are getting downvoted ;)

Are we just swimming against the tide here?

1
questnnansr•

Exactly and I don’t understand why. Think about it US has just surpassed Spain with the most deaths due to COVID, just recorded the highest unemployment since the Great Depression, nobody is traveling or dining in restaurants due to government restrictions, and hospitals are literally being overrun with lack of PPE and too many patients. And people actually think this is a truly bullish market right now? Get real, reality will catch up with this market environment it’s just a question as to when...

2
ajfaOP•

That's what I'm thinking, too...

Cases of COVID-19 are dropping because of social distancing, not because the problem is gone.

If you look at Italy, or even China, it's not like everything is back to normal and business is booming after cases peak. If you look at BABA or Samsung stock you can see they've matched the US and global markets -- there are no safe havens.

1
ajfaOP•

Updated the post. I had about 140k moved out of stocks and into bonds, when the market was down anywhere from 22% to 25% from its highs.

I don't have a financial advisor. Reddit is my financial advisor ;)

-3
onesagestudent•

I wouldn’t trust Reddit as my advisor, it doesn’t account for suitability and it’s only good for general advice and questions. While I think we may see another decline, nobody knows and it may just continue to go up until the next scare. The economy and the stock market are not directly correlated and people are already expecting bad news from company earnings. I would average in at 5-10% a week over the next few months until I was back AR a good equity/bond ratio. You have a decent amount of time before you retire so you shouldn’t react to market turmoil. As you get closer to retirement, I would get more conservative with my investments. One good thing you get from working with an advisor, is a solid plan they can adjust as things change, if you don’t want to deal with that, just buy a target fund and let them do the work.

2
ajfaOP•

My target-date funds got hammered almost as badly as the S&P.

1
onesagestudent•

Of course they did. But as you get closer to retirement they will rebalance the portfolio and make it more conservative.

1
alwayslookingout•

Which of your Reddit financial advisors advised you to do what you did?

2
UpstreamOil•

There's a lot of bad advice in this sub when markets crash.

1
orangehorton•

buy high sell low, love it

7
ajfaOP•

OK that's great, but these are slow-moving mutual funds we're dealing with. I'd prefer not to day-trade my 401k and Roth IRA, at least not any more than I have to...

-2
qbafb•

When the market is down > 20% it is already too late to sell and/or make drastic allocation changes. At this point if you are a long term investor you should just stay put and wait for recovery. Unrealized losses > realized losses. Use the draw-down to add money, reposition some assets and tax loss harvest taxable accounts.

Also if you have to make huge moves when the market drops you probably have wrong allocation (investment objective).

2
ajfaOP•

So, stay put in bonds right now? Or buy back into stocks?

1
qbafb•

First think about your long term asset allocation. How much stocks vs bonds do you want to have. And slowly start to buy equites (diversify!) to meet your target. Take some time so your average the price a bit.

Just know that stocks are volatile so plan to keep them for 8+ years. Bonds are for safety - with rates being low and staying low your return will be minimal. I like longer duration and credit - especially with the central banks propping the economy.

The worst thing you can do long term is trying to time the market.

1
100PERCENTYOLO_VEQT•

buy back in May's new lows

2
Pitsqueak•

Waiting for companies to report earnings will probably be the best thing to do imo. I know there are some people saying these are throw away earnings for Q2 and Q3 and that investors need to look future earnings in 2021. I think that’s a smart strategy to a certain point, yes you can find reliable companies with strong balance sheets that will rebound out of this Covid situation in the long run. But on the other hand just because the companies balance sheet is strong now doesn’t mean they’re going to see the same demand on the other side of the tunnel. It’s definitely going to be a task trying to find a strategy to invest in this market of uncertainty. There’s so many things that play a factor in this market now too(not that there wasn’t before)....massive stimulus packages(unlimited in-fact), potential vaccines or antivirals, uncertainty of the time table of covid, wether or not it could potentially mutate down the road and have another widespread infection, OIL....fuck oil...., companies suspending dividends. Potentially false hope on how soon the economy gets going. I mean shit... the list goes on and on. If you find a company you think long term will weather the storm and it’s a reasonable price to your judgement then dip your toe in the water. Taking little bites here and there in strong companies as long as you have time to let the money grow has been prosperous in general. If you’re feeling frisky/nervous about what you invested in you could even short your positions within reason. But be warned don’t let false hope that economies will go back to normal as soon as this is over fool you. Things will be different, companies will fail....eventually, there’s going to be a big change in the markets. Best wishes!

Spy 6/19 $240P

2
ajfaOP•

Thanks.

A few weeks ago I was day trading, and I did lose about $2k trying to short the market while the Fed was pumping money into it. I have friends/family who have lost a lot more. I wouldn't be surprised if TVIX and SPXU made comebacks, but honestly I'm not sure I have the stomach for that anymore (even if I did have the cash).

Timing is everything.

1
forgottenpassword182•

DCA back in over next few months. This market is volatile, so I would buy weekly.

2
ParmesanLebron•

It depends on how far you are from your target retirement age. If it’s far away, throw your money back in the market and let time run it’s course.

1
reignsre•

Invest some. Keep a portion in cash/bonds where you feel you would not do this again for emotional reasons.

1
tasrill•

Bonds have only been slightly less volatile then stocks these last couple months. So honestly keeping 3-6 months of living expenses in pure cash for the next year or so till the market stabilizes isn't a bad idea. Risk mitigation is good and the most important part of that for the majority of investors is planing around losing your job during a bad job market and a market downturn.

1
ajfaOP•

Thank you all for your advice (the downvotes don't help too much, but I guess I deserve it?)

I have about 25 years until retirement. ~140k in assets (divorce... don't ask...). Currently 70% in bonds/money market, 10% bought back into the S&P 500 mutual fund, and 20% in a target date 2045 mutual fund.

My plan is to wait until the next batch of earnings reports comes out, and see how the market reacts then. My theory is that at some point people will get used to the Fed handing out money, and they'll have to evaluate businesses on their own merits, and not like what they see coming in the next year.

1
LanceX2•

man if you got 25 years just buy back in next time ypi feel better and dont sell again.

People been saying for 3 weeks we are dropping X day. Hasnt happened.

Now charts of last bear and bull marketa usually show multiple crashes but noone knows when. It could crash next month or 6 months from now when noone is buying things.

Or opposite.

2
ajfaOP•

So in short... stick with bonds, slowly buy back in when future prices drop and crashes happen, be patient?

1
LanceX2•

Dont get me wrong. Im new and no little about buying stocks but I have a financial advisor for me and my wifes roths. Granted they take more than vanguard etc but Im okay with it.

My roths are growth stocks mutual funds and etfs. S and P.

but yes his advise is time in market is better than timing the market especially if your money is mainly for retirement purposes.

You can DCA your money back in.

say 10,000 a week and if you see a big dip happen than maybe lump sum it in.

I have 21k in roths and 2000 in individual stocks I bought.

100% of my savings is going to Roth now which is guided by my advisor.

I bought 2000 of cruises airlines some real estate and pot stocks because the dip was so big and I know Ill double my money or better

but im done buying my own stocks now until I sell my stocks for profit but Ill roll all profit into my roth most likely.

1
HumbleHubris•

A lesson from past dips and applied to the current environment is that we can expect the overall market to go back down, but not all stocks will go back down.

My opinion, since you asked, find individual stocks with attractive quick and PE ratios, and/or find funds in defensive and/or inflation protected segments.

The Fed just put a stagflation casserole in the oven so the worst thing you can do is hold bonds or too much cash. Shit, get crazy and have a little fun in commodities; it's where the CTA money is.

1
bjornbr1•

You learnt a valuable lesson.

Don’t sell your shit for short term gains unless you need it.

Stay broke brotha

1
Chesterbobby•

You done goofed

1
flyingabove350•

At this point wait for a dip. Also, don't look at the market as a whole but look at individual stocks. There are a lot of good stocks out there. Invest in something you know.

1
[deleted]•

[deleted]

1
Morganomally123•

Lolol

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