Comments on: We Liquidated Our Target Retirement 2050 Fund

By: Will

Will — Thu, 05 Jun 2008 21:25:37 +0000

This almost definitely was a mistake. It was a panic sell and an effort to time the market. You have to pay Vanguard to buy the funds back, and you might have paid redemption fees. Also you may have triggered a taxable event by selling.

Are you planning on buying when the market bottoms out? When is that going to happen?

By: Miller

Miller — Tue, 18 Sep 2007 19:50:06 +0000

So how much money have you lost since you sold this money now (don’t forge to include cap gains tax!)? =P

(you obviously don’t have to respond to this jab)

By: Aaron

Aaron — Fri, 24 Aug 2007 01:50:12 +0000

I certainly have to question the timing of selling the fund now. It certainly seems like a panic sell. I agree with some of the others that say it seems that the problem was either a. you shouldn’t have bought into this fund in the first place or b. you sold at a bad time. The market experiences these problems, if it bothers you then this fund isn’t right for you, but selling on huge down days isn’t the best usually. Corporate profits are still very strong, consumer spending has held up fairly well considering all the economic problems, and valuations are not high currently in the market.

By: newbie investor

newbie investor — Tue, 21 Aug 2007 23:32:17 +0000

hello all,
i’m new to investing for retirement. what
is the difference b/w roth ira and a target retirement fund?
are they the same thing? if someone can give me a
brief outline, it would be greatly appreciated.
thanks

By: Mike

Mike — Sat, 18 Aug 2007 05:24:51 +0000

It was a mistake. The market had a short term correction, and is about to bounce right back and hit new highs in the next few months. Mark my words…

By: Scott

Scott — Thu, 16 Aug 2007 13:21:23 +0000

Div Guy – look for the rebound sometime around Christmas That’s when I plan to reinvest my $239487239482347.16 back into the market.

By: Miller

Miller — Wed, 15 Aug 2007 16:17:51 +0000

Quick question… when did you buy (or perhaps you’ve bought multiple times)? Have you calculated your average annual return?

I bought ~10k of an index last summer kind of similar to you (”let’s just see what happens… probably a non-long term thing, but nothing really in mind either”). Even with the current drops, I am up ~10% annualized. Sure, I don’t get the greedy 20% I would have a month ago. But let’s keep perspective… 20% is greedy (its bad to be greedy!), and 10% is just fine.

With that said, I might follow suit and sell. But not because of the market, but because my time line on this money might be sooner rather than later, and it probably shouldn’t have been in the market to begin with! That said, I consider my 10% as lucky, not sad.

By: dong

dong — Tue, 14 Aug 2007 16:26:09 +0000

I’m with the others who echoed a need for plan. I don’t think there’s anything wrong with liquidating as long as you know when and how you’re going to get back in. Personally, my strategy through this is to buy some puts on the indexes….
I firmly do believe we’ve got more pain to feel. I’m naturally very bullish on the stock market, but there are things like the overall credit markets that need to be sorted out in the near term…

By: Jim Lippard

Jim Lippard — Tue, 14 Aug 2007 15:51:51 +0000

Fas: You’re fooling yourself if you think that only subprime loans are a problem. American Home Mortgage Investment Company (AHM), which just went under (and has been de-listed), doesn’t even originate subprime loans–their business was Alt-A and prime loans.

By: Dustin

Dustin — Mon, 13 Aug 2007 16:14:33 +0000

I’m with you on this one. I am in cash now too.

By: MoneyNing

MoneyNing — Mon, 13 Aug 2007 16:02:35 +0000

In the long run, this is a mistake because you can’t tell when the market will go up or go down in the short term. You can increase the odds of being right in predicting short term up or downside if you are constantly analyzing the market etc etc but even then most people who do that end up being wrong half the time.

I don’t believe the market is going to tank because valuations are not extremely high right now and we are only 5-8% down from a year of a virtually unstoppable bull run up.

In a week, you could be right because the market could have tanked and you would look like a genius. Since most of us can’t tell whether it will go up or go down (whatever CNBC says btw) though, it is not advisable to time the market as that usually means selling low and buying high.

By: The Div Guy

The Div Guy — Mon, 13 Aug 2007 03:04:10 +0000

Scott,

Since you can tell when the market is going to drop, can you tell me when it’s going back up again so I can be ready? Many thanks.

The Div Guy

By: Pinyo

Pinyo — Mon, 13 Aug 2007 01:43:42 +0000

Personally, I sold a few things in the past days myself, but not to get out of market. I was moving money to what I believe are better investments.

Anyway, I never like target retirement fund because they tend to be (1) more expensive, (2) does not have the exact asset allocation that I like (i.e., I think most are too conservative), and (3) does not give the sense of control (i.e., I like to reallocate when allocation percentage shift by a few points).

I hope you can find another investment to keep your money in play. I would not keep it as cash right now. May be you can look into some small value ETFs. Just make sure what you buy is not overweighted in financial — divesify, diversify, diversify!

By: Scott

Scott — Mon, 13 Aug 2007 01:28:31 +0000

I transferred 1/3 of my retirement funds into “safe” holdings out of stocks (particularly US stocks) about one week ago. I saw enough signs that I’d seen before that this market is going down. For all those doubters and statisticians here, please explain how the market can gain 15-20% so far this year and not get corrected back towards historical averages of 7-8%? When the first half of the year was this unexpectedly good you have to know that the second half is going to stink. And we’re not even to horrible September yet…

By: Eric

Eric — Sun, 12 Aug 2007 22:21:02 +0000

Your $500 Million estimate of losses across all the sub-prime lenders in a $10 Trillion economy just makes me grin. Yes, to the poor guys like you and I a half-billion bucks sounds like a lot, but realistically the impact on the economy will be minimal.