Expecting the stock market to crash soon?

New / Eng MDOy74
Sep 29, 2017 86 Comments

There seems to be lots of consensus that we're about due for a crash. Is it worth moving some funds out of the market and into something more stable for the short term?

I've got most of my savings in Vanguard's Retirement 2050 fund, and while it's done well (~15% per year) the last couple of years, it's 90% stocks, and the risk level according to Vanguard is 4 out of 5.

Is it worth moving to a less risky (2 or 3 out of 5) fund for the next year or two and then moving back into an aggressive 4 or 5 out of 5 fund after the market crashes a good bit?

Risk is the market won't crash immediately and I'll lose out on some big (15%) gains during that time. But I should still have moderate (5%) gains during that time. Benefit is if the market does crash, I won't lose nearly as much, and I can put most of it back into stocks and ride the wave back up.

Is this naive? I remember my portfolio taking a hit during the 2008 recession and it took a couple years to get back to even. Would be nice to avoid the dip. Seems extremely unlikely for the market to rise indefinitely without any correction.

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TOP 86 Comments
  • No one has a crystal ball. The consensus you mention is horseshit. The market goes up and down but up over the long haul. Stay invested.
    Sep 29, 2017 4
    • Nike / Eng uncle phil
      Sparta!
      Sep 29, 2017
    • Tesla / Eng OnVx58
      Stay invested, don’t stop the contributions while market is going down. You will understand what I am saying in 5-7 years, be patient
      Oct 2, 2017
  • Microsoft / Design FRQE40
    Someone on here put it perfectly awhile ago. Time in market beats Timing the market. Always.

    (Unless you have orange crop insider trading materials for next year)
    Sep 29, 2017 3
    • Microsoft / Design FRQE40
      Looking good, Billy Ray
      Sep 29, 2017
    • Fitbit
      Feeling good Louis.
      Sep 29, 2017
  • Tableau idontgitit
    I still can't believe that some people still attempt to time the market! There are countless studies that prove it's the worst investing strategy.

    Remember that to be successful with market timing, you have to be right (or more accurately, lucky) twice: when to get out and when to get back in.

    Yeah, sure we all know someone that was successful once or twice. But, NOONE can do it successfully on a consistent basis.

    Be wrong just once or a few times and your future self will hate you for being silly.
    Sep 30, 2017 13
    • Tableau idontgitit
      I appreciate the healthy debate guys. I think timing the real estate market is equally difficult but for me that's entirely different. You should buy a house because you need to live somewhere and prefer owning instead of renting for one reason or another. Not because you expect to turn a profit. Historically house prices just follow inflation.

      As for scaling back your stock portion from (say) 90% to (say) 40%, this is still timing the market so I think you can guess that I'm not a huge fan. However this is likely a better idea than completely getting out of the market.
      Sep 30, 2017
    • Groupon rahul
      CAPE.
      Sep 30, 2017
  • eBay pWrI68
    I sold most of my stock last Oct-Nov timeframe expecting a stock crash. Last week I swallowed my pride and rebought it. Biggest mistake of my life trying to time the market.
    Sep 29, 2017 4
    • Workday LRocketMan
      timing the market is never a sure thing. In my opinion, t's not trying to time it that was dumb. It was not accepting or being prepared for the possibility of being wrong
      Sep 30, 2017
    • Facebook Gôoglę .
      Bonds also fall, folks.
      Sep 30, 2017
  • This comment was deleted by original commenter.

    • Fitbit bDUn33
      Doesn’t matter unless you’re about to retire. You still own the same number of shares, it’ll come back.
      Sep 29, 2017
    • Fidelity Investments trash1337
      Actually it's better during a dip because if u reinvest divs you get more shares
      Oct 2, 2017
  • Microsoft / Eng
    ➡Nutella⬅

    Microsoft Eng

    BIO
    Nutella
    ➡Nutella⬅more
    It's not like we're due for a crash. It's that we're in total economic shambles that QE simply delayed and made worse. It's blowing in the next months.
    Sep 29, 2017 4
    • Fidelity Investments trash1337
      Yup the economy is bad shape. That why unemployment is low, housing market is on fire, and companies are posting record profits
      Oct 2, 2017
    • Groupon rahul
      I was going to say don't mention those 3 things as proof 😁
      Oct 2, 2017
  • Accenture / Other
    obamacare

    Accenture Other

    BIO
    Patient Protection and Affordable Care Act
    obamacaremore
    Stop trying to time the market. If there is a downturn, double down on your positions while asset values are low and then recoup your losses and then some when the market bounces back
    Sep 29, 2017 4
    • KPMG kETx61
      I was and did exactly that. Sitting on $50k in gains in my 401k as a result.
      Oct 1, 2017
    • Google QrhU10
      Get ready for another crash and going back into more negative
      Oct 2, 2017
  • New / Eng
    booboo08

    New Eng

    PRE
    barclays
    BIO
    Software Engineer with 10+yrs in wall st tech
    booboo08more
    One of my colleagues went “all cash” last December in anticipation that the market was about to crash. Did it?
    Sep 29, 2017 3
    • New / Eng
      booboo08

      New Eng

      PRE
      barclays
      BIO
      Software Engineer with 10+yrs in wall st tech
      booboo08more
      “Cash” in that case was “bought us bonds”
      Sep 29, 2017
    • Databricks / Eng
      datadicks

      Databricks Eng

      BIO
      I suck
      datadicksmore
      Bonds is not cash
      Oct 1, 2017
  • Google QrhU10
    There will be some sort of pullback. 5-10% correction but there is no recession in near term. Look for yield curve inversion before confirming recession
    Sep 29, 2017 2
    • Workday LRocketMan
      No recession in the near term? Says what?
      Sep 30, 2017
    • Google QrhU10
      Says the yield curve inversion
      Oct 2, 2017

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