I'm considering putting my small pile of retirement money (SIMPLE IRA) on "the shelf" for a short period.  Has anyone reallocated their portfolios to more of a cash position in the event the market could have a large adjustment?  I'm thinking of literally "pausing" the earning power for the next 90 - 180 thinking that the market could adjust 20 - 30%.  At that point, I would reallocate and re-enter the market.  How much higher can this market go without a major correction?

Is this a bad idea?  Please give me your thoughts.

Do what you need to to sleep at night. There could be a big move one way or the other depending on what happens in DC.

Which way do you see market based retirement accounts going?  I too, can see it going either way.  My problem is I don't see huge upswing (more than 20%) before we see a large readjustment (loss of > 25%).  The pause button is seeming to make more and more sense to me.  Maybe lessen my exposure and push 1/2 of my portfolio to a cash position.

Most cash positions are actually in bonds, including US treasuries.

I understand nothing is guaranteed, but isn't that a safer vehicle as far as holding value?

It's nearly impossible to predict the market.  If a correction was generally accepted as "likely" then we'd already have one.  

Slow and steady wins the race.  If you think a correction is likely, then why not stand pat on what you have and let all your upcoming contributions go to cash?  Maybe even convert 25% to cash now so you have some chips for a buying opportunity.

I wouldn't advise going all or nothing though.  Chasing the market like that just adds volatility to your portfolio as there will be times when you guess right and win big and times when you guess wrong and lose big.  The goal is to do well over the entire course of your working life and "average" a decent return.

I'm still in my 20s so what I do might not be right for you.  I've moved part to a money market, but I have also left some in. I've also moved some to commodities.  I do agree that there is more downside potential than upside in the market right now, especially after the Senate voted down cut, cap, and balance. I really have no idea what will happen though. The market is higher right now than I thought it would be at this time.

I wish I knew the answer to that. Especially if the govt defaults on some bonds.

What makes you think there will be a big move up?  I can understand a big move down and a mediocre move up.



I can't see a big jump by the announcement of a deal.  If a deal is reached I can see a bit of a rise and it's one I'm happy to sit out because it will just fall back after people realize the debt limit didn't aide the economy substantially and all it did was allow the US to keep its AAA rating.  There's also a possibility the rating gets downgraded anyway if the spending cut isn't sizable enough to the reviewers and a default still looms just farther out on the horizon.



I moved to a lot of cash last week to lock in my profit and be able to have cash ready if there's a drop then an outlook of recovery.  The wife's Roth IRA was up 50% but she only put $1000 into one index fund in 2009.  I suggested she cash out since she's more likely to lose the money if the deal isn't reached.  If a deal is reached she won't double her investment and then she can move things over to a target retirement fund like I've been suggesting she do anyway.



 

Earnings reports have actually not been too bad.  I think the market is overpriced right now, but I have thought that before and it just kept going up.  I have more bias to the downside, but I have been wrong before.

going fucking nuts thinking about this.  Oh yeah, sit tight.

pretty sure today was correction day, 1.1bill down volume!
and yeah we are half way to a bear market, down 10% , only 10% more to go, and yes we will make it there.
Putting cash up right now is the thing to do however bank have already begun to charge for it.

The way everything looks right now I would most def just sit tight and ride this thing until the momentum of todays trades slows up and comes to a stop.

im considering doing this with my 401k - move it all to the moneymarket/stablecash fund.  wish id have done this a few weeks ago

OP 7/20/11
go with the gut...

Can I borrow your crystal ball next?  

Nice call OP.  Did you act on it to avoid the last week's drop?

Fuck no I didn't.  I couldn't get anyone to see what I was seeing.  I think my portfolio is down about 20%.

Ouch.  On the bright side, now's a great buying opportunity if you have cash.

buying, yes.  But still (*).