Originally Posted by
Dorn
I agree with above comments but I would recommend not falling into the trap that the "set it and forget it" methedology is sound especially for those who are closer to needing their 401K funds. I think anyone who even occasionally pays attention to the market would have agreed this last few months pretty much everyone was saying this market has overreached. Pigs get slaughtered. don't get greedy. If you have made a nice return and see that your closer than farther to a pullback be smart,move your assets into cash or at least some of it. Drops like we just witnessed are buying opportunities see them as such. The number one rule is protect your assets. Im not suggesting to become a "trader" just that its important to participate in the management of your retirement.
The cash conversion you speak of is easier discussed than done successfully. Even if you guess correctly and get out of stocks fortuitously prior to a rare big drop, when do you get back in? Timing a buy is the other half of the equation. If you want to stay ahead of inflation and make gains, diversifying risk and incremental adjustments over your timeline is the way to go.
Lifecycle funds do this for you and are very stable. I think the novice, which we all are, benefits from the set it and for get it consistent dollar cost averaging. Look at the major pension fund managers, they are not traders. If your retirement is the subject, consistency over time is key.
I also have a brokerage account that is my "play money" which is my speculative "swing for the fences" investments. I have done well with that over the last 5 years, but it could all go away quickly and I'm OK with that. BTW, all my big wins have been deep value plays. The growth names have done well but once the masses start talking about the name, I'm out.