Hope You Got Out Of The Market

[MarioG]

Karl. My wife and I are in our early to mid 30's, far from retirement. Pull our 401K out now?

[Genesis]

Mario - you're late. WAY late.

I would wait for the reflex rally. There will be one, but there may be one more sickening drop before it happens. In fact, I rate the odds of a blowup next week at 70%.

The problem with this is that when that reflex rally comes its going to be a "rip your face off" event, and people WILL be tempted to buy back in if they sold here.

Guess what - people did that in 2001 too and got destroyed. History says that after this next decline (unless we rally hard here and now) there will be a nice bounce, several months long, then the REAL downside bottom comes, and that's the one you definitely don't want to be in for.

[krush]

Karl. My wife and I are in our early to mid 30's, far from retirement. Pull our 401K out now?

I put my measly 401k in the "safest" fund I could choose from the vast selectino of 12 funds. It was a "capital preservation fund"...when my current rate of return is 0.27%----the rest are all negative!

Glad i didn't listen to the idiot HR people and other "know alls" at work.

[MarioG]

Mario - you're late. WAY late.

I would wait for the reflex rally. There will be one, but there may be one more sickening drop before it happens. In fact, I rate the odds of a blowup next week at 70%.

The problem with this is that when that reflex rally comes its going to be a "rip your face off" event, and people WILL be tempted to buy back in if they sold here.

Guess what - people did that in 2001 too and got destroyed. History says that after this next decline (unless we rally hard here and now) there will be a nice bounce, several months long, then the REAL downside bottom comes, and that's the one you definitely don't want to be in for.

Do I cash out then or do I move into low risk investments?

[Genesis]

Define "low risk".

I think there is a very good chance that 768, the 2003/04 low on the S&P, does not hold. If it doesn't 500 is the next target, and it is POSSIBLE for us to see 200.

Oh, with that 200 comes a global depression.

All this talk about Bretton Woods III? Its a threat. So is the announcement from Taiwan that they no longer consider "agency" securities to be rated paper.

The bailout was a huge mistake just like Fannie and Freddie before it, and now the "crowding out" paradigm is in full force. Pension funds are being forced to liquidate to meet current obligations, which is a slope that once started down, leads directly to a crash.

We had the opportunity to stop this, and failed. Now we must eat the consequences.

As for exact timing on an exit if you're still in the market, I don't know. Its all high-stakes gambling here. We could literally crash Monday.