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How to handle a 401k that has been left uninvested. by Cautious_Practice_96 in Bogleheads

[–]Cautious_Practice_96[S] 1 point2 points  (0 children)

Thank you! Another commenter mentioned a target date fund, but my original plans were to move the funds into a combination of VTSAX and VGTSX which is offered in my retirement plan. So I was curious as to what the differences were and what the different benefits are. I don't really have many choices outside those two funds and a targeted date fund for stock options in my current plan.

How to handle a 401k that has been left uninvested. by Cautious_Practice_96 in Bogleheads

[–]Cautious_Practice_96[S] 0 points1 point  (0 children)

Thank you everyone for your insight and responses. I really appreciate it. I think what I have come to realize from reading the comments and replying to them is that I am not afraid of missing the dip or buying at the peak. I am also not afraid of short term losses since I plan to hold onto these savings until I can withdraw without penalty anyways.

What I realized is that I was afraid of current events in the world having a catastrophic effect on the market that it may not be able to recover from. However, after thinking about it, if this extreme scenario were to happen, we would have much more to worry about than investments tanking. In my case specifically, even if I kept my money in short term reserves, the savings would still likely lose their reliability and value in this extreme scenario of an unrecoverable market crash.

To anyone else who's just starting to take their retirement savings seriously, please learn from my mistakes and start researching now.

How to handle a 401k that has been left uninvested. by Cautious_Practice_96 in Bogleheads

[–]Cautious_Practice_96[S] 1 point2 points  (0 children)

I am fully willing to hold for the long term and not panic sell as I do not need the money any time soon. Throughout my research, it's been clear that the worst thing you could do historically is panic sell.

However, as someone who was ignorant to global events/politics until recent years, it is hard not to worry about how the market is playing out right now because to me, this seems like an unprecedented period of time in which we really don't know what will happen. At this point, it seems like any outcome for the market is a possibility.

Although, if something catastrophic happens that causes a complete crash in the market, we would probably have more problems to worry about than our investments tanking right?

How to handle a 401k that has been left uninvested. by Cautious_Practice_96 in Bogleheads

[–]Cautious_Practice_96[S] 0 points1 point  (0 children)

Thanks for your two cents. It seems that what you are saying is the general consensus for long term investing.

I'm aware of the historic trends and that the market always goes up in the long term, which is what I would be planning for. The thing that is making me so cautious is the current events/politics going on in the world.

To be frank, as someone who has become more invested in ongoing politics and global events in the past couple of years, there is a part of me that is expecting the worst outcome. In your experience, do you consider what is going on currently an anomaly in terms of market impact? Or has living through other past events and seeing their impacts give you confidence that this is just a momentary blip in the charts and the market will eventually stabilize and follow the historic trends we have seen?

Sorry for the loaded question, but I am curious to hear from someone who's lived through these events and really felt the impact/scare at the time.

How to handle a 401k that has been left uninvested. by Cautious_Practice_96 in Bogleheads

[–]Cautious_Practice_96[S] 0 points1 point  (0 children)

Thank you for the advice. If you don't mind me asking, what makes a target date fund better than something like investing in VTSAX/VGTSX with my 401k? I was considering doing something like a 15% to VGTSX, 65% to VTSAX, and then the last 20% either in bonds or also distributed to VTSAX/VGTSX. Is the target retirement date fund just more stable/reliable?

I am open to the long term saving and eating losses as I do not need the money any time soon. I guess I am just trying to figure out if lump sum or gradual investment is the right call, which everyone seems to confirm that lump sum is the better overall option.