Yeah this all makes sense. I was thinking along the lines of trying to time the market - I can't imagine it will do anything but correct at this point, and I was thinking it is possible to shield my gains from the drop, then put the money back into 100% stocks once I feel the bottom is in. However: I have no way of knowing how close we are to the top, nor will I have any way of knowing when we are close to the bottom. I could get lucky, or not. I know 35K isnt much, and I also have ~35K in pension as well which will not drop, defined benefit as it is. Just makes me nervous seeing the exponential rise in the value of equity, how high can it go? But, I should remember that the market is not rational and attempting to predict is going to be a total crapshoot. I should stay and get used to the idea of fluctuation. Actually, a big drop now would be a good thing for me in the long run, it would allow me to purchase more stocks at a discount for the long haul. I have read the J Collins stock series, I know he recommends 100% stocks for almost everyone. Thank you all for the reality check and the reassurance. It will all be ok.
What you're experiencing is a combination of behavioral economics errors, all of which are normal, predictable, and wrong.
(1) You have no idea when a market top is and what will happen next. There's a 50-page thread on this called "Top is In" as well as many, many threads along the years that have "called the top"--all incredibly incorrectly at this point. In short, you have no information that the market doesn't have, which means that you don't have any way to out predict what the market will do. You can guess, and you might get lucky, but statistically you're likely to get it wrong because . . .
(2) Over time, the market goes up. Yes, there is volatility in the short term. But over long periods of time, the market always goes up. If you sit out, you lose money. The problem is that you--statistical you--treats losses as being twice as bad as gains. Your instinct is to protect against potential losses, thus missing out on gains. And if you want to have some fun, pull up the S&P 500 chart on google and look at it's overall trend (which doesn't even include dividends). The market is up dramatically from every point in history, including most recently February 2007.
(3) You have no idea when the bottom will be. Let's say 2 years ago you decided that there would be an imminent 10-20% drop. The market is up 40% or so since then. When do you get back in? Do you wait for a 30% drop, that still puts the market above where it was 2 years ago? All you're doing is guessing, and the problem is, you won't be able to act on that either. Because if you think start thinking about market timing, and the market drops 30%, are you really going to go all in at that point or maybe continue to be worried about even more drops? What about in 2007-2009? It was a 60% drop. Really think that 30% was going to be your magic number? What if you decide 40% and it only drops 30% then roars back? Never invest again? It's an impossible analysis because it's just based on guessing, and behavioral economics says you're bad at guessing.
(4) You're not talking about much money if the market drops. Indeed, you shouldn't be talking about losing any money at all. You shouldn't be selling soon, so short-term fluctuations don't matter that much. And even if they did, let's say you "lost" $20,000 because the market dropped. Do you think your retirement calculations of how much money you'll need forever will come down to $20,000? It's not a significant amount given what you're ultimately playing for.
(5) You have to rely on the market long-term unless you are going to work forever. The only way your money grows and outpaces inflation is to invest it. Investing in the market has risks, sure, but not really over long periods of time. You eventually have to trust the market in order to get enough money to retire. Otherwise, you have to earn and save an incredible amount of money through salary, which means working a long, long time.
And one more point just to show how unreliable your "rational" thoughts are. You are worried about the market dropping. Yet you've only saved $70k towards retirement, and probably need let's say a $1,000,000 or so. What is your ideal outcome right now? That the market drops 80% Monday! So what if $70k drops to $14k on paper. You're not going to sell it. And what you will get to do is buy shares going forward at an incredibly reduced price.
That point is why it's so ridiculous--rationally--that we fear market drops in the accumulation stage. You should absolutely want the market to plummet while you're still buying shares, only for it to surge upwards right before you start withdrawing money. Of course, that's not at all how we feel. Think of how exciting the market run up has been, and realize that all it means is that you've been buying more and more expensive shares.
So, you can't trust your thoughts when it comes to investing. That's why you pick an acceptable market allocation for you (probably still a high percentage of stocks at your age), write it down somewhere (investor policy statement), invest in total stock market index funds and total market bond funds (if any) based on whatever allocation you decided (because you don't know anything that the market doesn't know), and automate your investing so you don't have to think about it. Because the only way to overcome behavioral errors is to remove or reduce the opportunity to make them.
Hope that helps. I'm also referencing
@boarder42 because this is exactly the kind of discussion we had in another thread about how to handle situations where people make behavioral errors that cause them to do the "math" (analysis) wrong.
Good luck!