2P Man wrote:
I just cashed out my S&P 500 Index fund and transferred the money to a money market fund that averages about 2.2% per year. This rally is not sustainable. The S&P 500 is already above the median end of year target of 2960 and is subject to significant fluctuations from random Trump tweets like we saw in May. Earnings this month are expected to be brutal and will likely be disappointing for the next several months. The FED rate cut has already been factored into the current market price. The bond yield curve has been inverted for awhile now. And the results of tariffs are finally going to start showing themselves. A 5% drop is almost a given between now and Dec 2019. A 10% drop is very possible. I cannot the say the same about even a 3% increase from today's levels. Could be wrong though.
Why would you ever cash out? Are you retiring soon? So what if the market loses 10 or 20 or even 50% in the short term. Are you not in it for the long haul? The market has had dips throughout its history. The reason investors never match the returns of the market is because they think they can time the market and THEY CAN NOT. Leave your investments ALONE. Give you investments time to grow and grow and grow. At its historical average of 11% (with dividends reinvested) your portfolio will double EVERY 6 OR 7 YEARS. So your $100K porfolio now will be worth (at historical trends) 200K in 2025, 400K in 2031, 800K in 2038 and 1.6 million in 2044. In 25 years that $100K will have grown to 1.6 million and THAT IS EVEN ASSUMING NO OTHER INVESTING IN IT!