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1QAte4 t1_j38aokz wrote

Reply to comment by CertifiedBlackGuy in Nonfarm payrolls rose 223,000 in December, as strong jobs market tops expectations by caesar____augustus

If you are young and have a steady stream of income, this is actually a great time to invest in the stock market. Keep investing in established companies or ETFs and learn to ignore the red. When the stock market rebounds you will see big growth. It just may take a little while. Be patient.

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CertifiedBlackGuy t1_j38czbl wrote

Believe me, I know. Anyone not retiring is getting stocks on sale right now.

I'm 27 and I tell my retirement-age coworkers thanks for transferring the value of their 401k's to mine ;) Some of them took pretty big hits, but that's mostly on them for not shifting the value to more stable, if less growth, forms of investment.

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Savage_X t1_j38rfdb wrote

> shifting the value to more stable, if less growth, forms of investment

That was not really an option when interest rates were at zero. And bonds got hammered in 2022 regardless. Sit in cash while inflation is at 8% was like the "best" horrible investment decision to make for retirees. This was the hangover from the rager party - little you could do to avoid it.

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CertifiedBlackGuy t1_j39aqxy wrote

By the time you're nearing retirement, more of your money should be moved to bonds and other stable investments. This should have been done in the years leading up to retirement, not as a reaction to the economy shitting itself.

If you're nearing retirement age and you're still heavily invested in stocks for the bulk of your 401k or other retirement source, you've done something horribly wrong.

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Savage_X t1_j39cd7h wrote

Point being, it made little difference what you were invested in. Bonds got killed in 2022 because rates changed so fast.

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CertifiedBlackGuy t1_j39dnk2 wrote

But your losses (factoring in inflation on top) would still have been less than if you're still heavily in the stock market.

That's my point. You can't react to a sudden economic crisis, but there are ways to mitigate loss.

Funnily enough, your analogy regarding cash is absolutely wrong in this case. Someone who had their entire 401k moved to cash in 2021 would be doing better than someone who's 401k was mostly stocks.

And a realistic middle ground: a heavily stability oriented portfolio would be somewhere in the middle.

The value of my 401k today is 3 grand less than what I put into it (37k vs 40k), imagine what losses others are feeling that could (and should) have been mitigated by age-based rebalancing.

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Savage_X t1_j39f927 wrote

Bonds lost inflation adjusted 20% last year. Stocks lost inflation adjusted 25%. Its a little better, but retirees had few good options.

> Funnily enough, your analogy regarding cash is absolutely wrong in this case. Someone who had their entire 401k moved to cash in 2021 would be doing better than someone who's 401k was mostly stocks.

Not sure how I was wrong when that is what I said :) Sitting in cash and "only" losing the inflation amount was the best investment. Which is still crappy, and only can be a considered "good" in hindsight.

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CertifiedBlackGuy t1_j39i6ci wrote

Ah, I misinterpreted that, my b¯\_(ツ)_/¯

I cede that level of knowledge of the market to you. I yolo'd my own money in 2020 and made a stupid return, but that was money I was willing to lose. My own non-401k investment set up is far more conservative. I think it’s 40% lower yield, higher stability with some dividend paying stock as a buffer to the remainder growth-oriented stocks and ETFs. I forget the exact make up, but it was set up this way when i made it.

My point was more that I know people who never adjusted for age or retirement goal on their 401k. The values might have been lower, but I imagine it'd still be higher than at present.

But I also recognize the last couple years sucked for everyone. And it's why, in general, I am a strong supporter of stronger social safety nets. The idea of sustaining myself on my 401k sounds like a pipe dream. Especially if the new standard is once in a generation economic crises every other year

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