Author Topic: Should I keep buying a ton of stocks in my 401k?  (Read 987 times)

Boogie_Howser

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Should I keep buying a ton of stocks in my 401k?
« on: August 16, 2018, 11:57:55 AM »
I've been maxing out my 401(k) contributions and shoveling most of the money into a steadily growing S&P 500 index fund. But with the market hovering near record levels, should I keep buying so much stock in my 401k? My plan offers a stable fund where I could stash a portion of my future contributions, then transfer a chunk of that money to my S&P 500 fund whenever the market tanks.

Or does it make more sense to stay the course and keep plowing ahead with stocks?

Thanks ...

FIRE@50

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #1 on: August 16, 2018, 12:01:42 PM »
Keep buying stocks. No one knows when the market will tank or rocket upwards or move sideways.

slappy

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #2 on: August 16, 2018, 12:02:19 PM »
Donít time the market.

Boogie_Howser

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #3 on: August 16, 2018, 12:20:28 PM »
Thanks, I'll keep staying the course.

mschaus

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #4 on: August 16, 2018, 12:25:40 PM »
This is a very common question when starting out -- this will be highly relevant, as are the links inside to the JLCollins stock series:
https://www.mrmoneymustache.com/2013/03/07/how-about-that-stock-market/

bognish

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #5 on: August 16, 2018, 01:06:24 PM »
I have been investing in a 401k for 15 years. Maxing the contributions most of that time and investing 100% in S&P index whenever available. Over that time I have had the same worries: I should move new money to cash? Maybe its the beginning of a crash and I should move the existing investment to cash or bonds? I stayed the course even during the 2008 crash. Looking back the times I would have sold would have been the wrong time. I would never have picked the right time to get back in. My returns would have been worse off than staying the course. Stick to your plan. Key your eye on the long term horizon and don't worry about daily, weekly, monthly gyrations.

seattlecyclone

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #6 on: August 16, 2018, 01:09:40 PM »
You need to come up with an asset allocation and stick with it. Maybe that's 100% stocks forever. Maybe you're more comfortable with 80% stocks and 20% bonds, or 60/40. You need to choose a ratio where you can feel comfortable promising yourself that you won't panic and sell everything the next time the market drops (and it will drop, sooner or later). Keep yourself at or near your desired ratio whatever happens in the market. Maybe that means you actually sell some bonds to buy stocks next time the market goes down, as a crash would push your bond percentage way too high. It's a great way to get some stocks when they're on sale!

Boogie_Howser

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Re: Should I keep buying a ton of stocks in my 401k?
« Reply #7 on: August 16, 2018, 03:54:04 PM »
Thanks for the great answers, this is really helpful.