Starting 401k near the highs in a bull market?

[SimpleMeLike]

Put as much into the 401k as you can afford. Consider it a separate investment from your trading account. It's backup money in case you blow up your trading account at age 64.

Even if the market tops today, dollar cost averaging will mean that you'll get cheaper shares all the way down to the market bottom and back up again.

shatteredx,

I 100% agree with you and that's exactly my plan.

 

[SimpleMeLike]

Everything else is noise pretty much

I agree, and it's best to get the simple things right first.

 

[bone]

I can't give you advise, but my daughter is 31, so I'll tell you what I told her. For long term savings, I believe, IMO, that dollar cost averaging is the best way to save over time. I told her to ignore market conditions and take the max she can put into her 401k they allow her.

Very well stated, Robert.

 

[fan27]

I am getting 401k envy reading this thread. Have not contributed a dime since I left my corporate job last July. Will get back on track soon!!

 

[ElCubano]

I can't give you advise, but my daughter is 31, so I'll tell you what I told her. For long term savings, I believe, IMO, that dollar cost averaging is the best way to save over time. I told her to ignore market conditions and take the max she can put into her 401k they allow her.

Yes. Do not time the market just stock away everything that you can. You will eventually want to time it. DO NOT I REPEAT DO NOT.

on another note, i'd give my 401K back to be 28 again lol.

 

[ElCubano]

Put as much into the 401k as you can afford. Consider it a separate investment from your trading account. It's backup money in case you blow up your trading account at age 64.

Even if the market tops today, dollar cost averaging will mean that you'll get cheaper shares all the way down to the market bottom and back up again.

Yes, and if the market crashes and never ever rebounds then most probably you will be out of a JOB and have other issues to tend to. Good luck.

 

[ironchef]

28

From someone who's been there done that, here are your most important edges:

1. Time, to add to your holding and to compound.

2. The wonderful law of compounding after 30-40 years.

Forget about timing the market the most important is in the market all the time with regular contributions. This will make you very well off by the time you are ready to quit your day job.

Oh, and if I were you, I go Roth so everything will be tax free when you withdraw.

 

[ironchef]

I am getting 401k envy reading this thread. Have not contributed a dime since I left my corporate job last July. Will get back on track soon!!

Then contribute to an IRA.

 

[fan27]

Then contribute to an IRA.

I have an IRA....just have not had a steady income since last July when I began working on my startup full time. That will all change soon.

 

[heavenskrow]

None of the U.S. examples would've been a big deal. You're gradually investing, not adding a huge lump sum at once. In fact, the top of 2007 would be good, because you'd continue to invest during the 2008 crash then recover everything else plus a lot more in a few years.

Japan has been a different beast. We haven't seen anything like that in the U.S. since the Great Depression. Technically, it took 25 years or so to recover from the Depression, but dividends were higher then, so if you reinvested dividends, you recovered a good bit faster.
https://investment-fiduciary.com/20...our-retirment-in-a-recession-even-depression/

But again, in a 401k, you'd be investing as the market dropped 40, 50 and up to almost 90%, then getting the gains on the way back up. They weren't around in the Depression, though.

Well yes in hindsight it would have been good to be investing in 2007 since look at where we are now in US markets. . But what if that had been in Japan in 1990 instead..... Anything can always happen in the market.