For what it’s worth I’m a young investor (late 20’s), and I’m staying in the market. All my current investing has perks too good to pass up. For instance:
401k – company matching. The market would have to tank 50% for me to “loose”. However as this is a retirement fund it is difficult to access until then.
Roth IRA – annual contributions limited by the gov’t. If you stop contributing, you can’t make up prior years (although you can contribute prior year until tax day). As I’m sure most know, Roth IRA’s are capital gains tax-free, but again they are retirement funds and difficult to access until then. I currently have this 100% in a Fidelity Freedom Fund, which is in theory risk-indexed to my expected retirement date and diversified appropriately across holdings. I don’t like the fund much, but I’m not sure where to move it to, and as I started this account last year there isn’t much in it yet which greatly limits my diversification options. I plan on continuing to max out the Roth annual contribution regardless of market state. If it’s down, I consider it “on sale”.
Company-sponsored stock plan – I buy at a minimum 15% discount, sometimes much more (last offering period saw 40%). Even in a downward market this is a no-brainer. The only question is whether or not to sell immediately or hold. As I work for a highly regarded medical technology & supply company and the boomers are getting older, a good argument can me made for holding on to it for a few years to get more favorable tax standing.
I do have an small financial windfall I need to find a home for – the result of an inattentive driver smashing into my side (no, not my car’s side. my side). I had planned on plugging it right into the market. The doomsday talk here has me reconsidering.
