Hedging 401K accounts

[Deez]

It truly is time not timing and nothing beats dollar cost averaging. Just try tweaking it a little. Corporations are always going to earn a profit with is why indexes will always rise at or above the rate of inflation.

 

[Cuddles]

To juice your returns you want to increase your contributions the further equity indexes move away from all time highs. For instance, contribute 5% regardless, if the market drops 15% bump it to 10%, and if it drops 30% bump it to 20%. You want to be invested in at least 80-90% equities for the long haul. Roughly 50-60% US equities and the rest global. You want to be 30%-40% of that in large cap stocks and the remainder in mid or small caps. For the remaining 10-20% not in equities there are REITs, commodities, and alternative investments such as hedge funds

Found a few "short" mutual funds ($GRZZX)....I generally don't rotate my choices since there's restrictions, but will buy into others depending on what I'm seeing. I suppose I could rotate to short or bonds in the interim.

To be clear, I'm still contributing regardless, the question is whether to stay solvent (which I'm allowed to) or put it into long-term funds (with the way the market's heading)

 

[Deez]

Found a few "short" mutual funds ($GRZZX)....I generally don't rotate my choices since there's restrictions, but will buy into others depending on what I'm seeing. I suppose I could rotate to short or bonds in the interim.

To be clear, I'm still contributing regardless, the question is whether to stay solvent (which I'm allowed to) or put it into long-term funds (with the way the market's heading)

Any 5 year period you’re 90+% likely to be up. Any 10 year period you have essentially a 100% chance of being up on that initial investment. Average correction lasts less than 18 months. Sounds like you may have 30 day restrictions on trades placed so must be nimble with shorts. You can go short I just wouldn’t allocate more than 10-15% of portfolio in short term speculation. If you think near a top a balanced fund goes 60-40 equities to bonds down to 40-60. So those also can take risk off at the top. Just a matter of being smart with dollar cost averaging contributions and asset allocation. Avoid the all or none way of thinking in a retirement account

 

[gmal]

The earnings yield is simply the annual dividend payout per share divided by the price of the asset. If SPY were trading at $100 and the dividend was $3/share annually that would be 3%. If SPY fell to $50 that $3/share would be 6%.

That actually is dividend yield. Earnings yield is just the inverse of P/E ratio
https://www.investopedia.com/articles/investing/120513/comparing-pe-eps-and-earnings-yield.asp

 

[gmal]

RedDuke,

I would be a damn fool not to invest in S&P 500 index if it drops to 60-80 percent. And I get dividends 4 times a year. Easy money. Ridiculously easy money.

Expected returns are higher when the markets are down a lot.

That being said investors are always braver at the top. If the markets are down 80%, then it has to go up 500% to break even. After depression in 1929, it took close to two decades before markets regained its original level.

Dollar cost averaging helped the investor who were young and kept on investing. But due to sequence of risk, retiree at the beginning of depression died eating cat food

 

[dozu888]

The earnings yield is simply the annual dividend payout per share divided by the price of the asset. If SPY were trading at $100 and the dividend was $3/share annually that would be 3%. If SPY fell to $50 that $3/share would be 6%.

you did explain it to @Here4money like he is dumb lol

earnings yield has nothing to do with dividends... the idiot actually bot it lol.

 

[Deez]

you did explain it to @Here4money like he is dumb lol

earnings yield has nothing to do with dividends... the idiot actually bot it lol.

Dividend and earnings yield is the same concept. Earnings yield doesn’t mean dick anyways because it depends on interest rates. But you already knew that right Warren?

 

[Cuddles]

you did explain it to @Here4money like he is dumb lol

earnings yield has nothing to do with dividends... the idiot actually bot it lol.

 

[dozu888]

Dividend and earnings yield is the same concept. Earnings yield doesn’t mean dick anyways because it depends on interest rates. But you already knew that right Warren?

Prove it

lol a pair of idiots...

 

[Deez]

And no not this Warren:

This Warren: