Home Forums Hunting & Shooting Hunter's Campfire Suspended Animation - The Market

Housing down for the 7th consecutive month, consumer confidence at new lows, debt still increasing and yet it still keeps on slogging upward. It truly can stay irrational longer than one can remain solvent.

Sell in May and go away? Moving stops are in place on a few.

already did. not greedy.

The exodus, of actual investors, from the market has reached the point where the manipulation is becoming transparent.

Where is a nice, safe place to stash your 401K until things even out?

Your 401k will have a money market. You could move it to there.

There's a lot more to the stock markets than housing...and the people that are investing in the markets are not those that are losing there homes.

And you now have 800k$ in money markets with how much of that insured and safe? Not bangin at ya, just asking. Safe was the question.

Charlie in case you haven't noticed it's the return of the little man that has this thing running up,,,mostly. Small investor sentiment is high right now. Which says..................

If it's in a 401k, and you're not eligible for an in-service roll-over/out, the money market is what you have. Now, if you're eligible for an in-service, you have other options.

Aren't money market instruments insured for up to 250k$/account (total) until 2013, presently?

Used to be only 100k$/account, I think but not sure.

edited for spellun

Fair question and I would answer that they are safe. Everything has risk, but is there realistic risk with an uninsured money market today? No. Especially when the question was asked in relation to the stock market and a safe haven for his 401k.

There are two "broke the buck" money market failures that come to mind, the Reserve Fund and one in the early 1990's out of Colorado. The later was a money market that only bankers could invest into which is somewhat faint justice.

In the case of the Reserve Fund which broke the buck due to a large holding in Lehman paper, the investors actually came out whole due to the minor change in NAV and it late enough in the year that the dividends made up the spread. Little comfort, but it beats the alternative.

I have quite a bit in the money market right now and I do not use an insured money market. The yields are so low that many of the insured money markets have a zero yield.

Back to the original question that Slipstream asked. He is obviously one that will take risk if he is in the stock market and wants to reduce it based on his question. The money market will be available in his 401k due to the DOL Rule 404c. He may be able to take an in-service withdrawal, but I would still move it to the money market while I was waiting on the processing if I were worried.

That is true at an individual bank. Insured money markets in 401k's or at brokerage firms will often clump many banks together and get that level well in excess of $1,000,000. I still think it is overkill to utilize an insured money market, but if that is what it takes to sleep then by all means use one.

Thanks, that's the meat I was looking for. Your comment on "faint justice" makes one grin,,,a lot.

Got any opines about PIMCO's and Harbor's newer "Unrestrained Bond Funds"? They are dragging in beau coup $.

Yes, but only via PM or phone call. I know you understand why.

Gotcha, thanks.

Ditto Longbob's comments, and for the same reason.

Don't forget- QE2 ending in May too.

Will be interesting to see about QE2. Sell in May and go away.

Some form of stimulus will remain and for a looong while.

The limit is $250k per account for FDIC money market insurance. If you have more and want to stay with one account ask your bank about CDARS accounts. That will take you into the millions.

I manage stock market risk with diversification and allocation between stocks and fixed income. For instance I'm about 30% in no load stock mutual funds and 70% in fixed income. I have maintained this allocation for the past several years and am happy with it.

I see the market continuing to increase, perhaps to new all time highs before year end. Q1 earnings will be coming in the next few weeks and should be higher. We are only eight months into the rally that began last July and IMO has a way to go. This would not be a good time to unload stocks.

Spanky;

The original question was re: 401k. Ergo, the answers restricted thereto.