July 2016 Market Comments and Why I've finally decided to Fold for the Time Being

in #investing8 years ago

I am 32, and I've been saving regularly throughout my employment since graduating college in 2007....Yes, 2007 right before the housing meltdown. So I've already seen a great example of a bubble bursting. Hopefully that was the worst slide I'll ever see. I've always contributed at least what's needed to obtain the full match in my 401(k)....roughly 6% with a 5% match. It hasn't always been these exact figures among the several companies, but it's about the average.

Since that time, I just kept contributing and letting it go, riding whatever came out....rebalancing along the way. That's what we've been taught, to dca in and maintain a long-term vision 30-40 years down the road to retirement...as we've also been taught that the market has averaged 8-10% throughout history. During this time, I've been limited to very cookie cutter choices within the plans, but they have indexed appropriately and done OK. I actually haven't calculated my exact returns, but I think they are closer to 15% due to the climb back from 2008. I also realize that I've missed out on way better returns due to this type of set-and-forget investing. By the way, my wife has been doing this as well and I monitor hers also since she's more hands-off.

Well, lately I've changed my view. I think this is due to the fact that I've been more focused on the day to day news. The market is at an all-time high...well at least it was last week when I pulled everything in our combined holdings to internal MMKT! Since these are retirement accounts, there's no tax consequences to taking a timeout, huddling up, getting some water, and watching on the sidelines. I CAPPED US OUT AT THE MARKET HIGH LAST WEEK. I FEEL LIKE I'VE EXITED AT THE TIP TOP OF TITTLEMAN'S CREST. The same high that was tested within the last month, reduced, and revisited. As far as I can see, indicators are turning and there's only one way to go....Down....for now.

Not a doomsdayer, but it feels like a scary time to just let it ride, even when we're at a fresh top. I'm not sure what it is, but I just have a bad feeling. And this is even with sticking it out through the recent Brexit.

Tired of conventional methods, I have to ask myself, "Why should we always ride the market through downs?" I think we're in untested territory. Can I rely on history? I feel with the sh*t stirring in the EU, the crazy election, the largest US companies reporting lackluster results, the national debt and its unknowns, the FED fakeouts on interest rates, daily terrorist activities...it's a smart move, for now at least. Now it's just time to fold the hand, sit back, and figure out a re-entry point. If the market dips, I'll capture the slingshot.

#market #investing #dow #s&p #retirement #finance

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Remember what happened in 2011-2012. I thought the euro crisis would sink the bull market for sure and yet here we are. I agree the current stretch is very long lived, but who is to say it can't go further?