Effect of posiible government shutdown on 401ks

[mursepharmd]

Do you guys think its wise to just switch to all cash for now until this mess in washington is over?

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[grumps]

Going into the end of a quarter especially the end of a FY and sitting in cash will be a very risky bet. I don't think it will be this year, but at some point the dollar will have to be devalued to delever the system. This could happen as a discontiguity overnite. The end of a FY makes a good starting point. For now I wouldn't make any drastic changes to a 401k allocation. If in equities stay in them. They will protect you from a dollar devaluation.

The mess in DC will never be over until a debt default/miltary coup. The ceiling has to be raised or the system deflates. Remember, what are bank reserves comprised of? Treasuries. That's why we got Medicare part D, the wars, student loan bubble, subprime mortgages, etc. The debt has to grow. This is the 2% inflation Ben refers to. It's not consumer price inflation, it is growth in credit. The banking system is like a shark, it must keep swimming ( growing credit) or die. Inflate or die.

 

[BMBiology]

This concern has already been priced in. This explains the drop this whole week.

It is better to have money on the side so you can invest if the market drops further.

 

[confettiflyer]

same crap, different year...grandstand grandstand grandstand back to normal, market has known this for a while...like BMB said, it's not a surprise.

My mantra is, by the time you think of it...the market is about 50,000 steps ahead of you and the price reflected reflects your thoughts. You're not special.

 

[pharmerjohn]

Do you guys think its wise to just switch to all cash for now until this mess in washington is over?

Like the others said, it's mostly smoke but no real fire. Not sure if it's worth the effort of switching to cash, which I don't think is as safe as many people seem to think. I put a nice chunk in commodities and it's given me very good returns for the past several years. Just my humble opinion.

 

[mursepharmd]

The fire is real after all

 

[confettiflyer]

The fire is real after all

meh... gov't shut down, been there done that. The real fire would be if we start defaulting on stuff...that's where the real fireworks are at.

 

[Momus]

I don't fully believe in efficient market hypothesis (that stuff is already priced in all the time) because sometimes human herd mentality can make market overreacts to the upside (PE close to 40 in 2000 tech bubble) or downside (PE <10 - great recession). Another example: Housing bubble in 2006 and housing is bad investment forever 2009-2011. That's when you really have to make a move and don't just sit still. You can make loads of money when you see the market overreacts. Right now, it's not the time to do anything...

 

[lisinopril]

I don't fully believe in efficient market hypothesis (that stuff is already priced in all the time) because sometimes human herd mentality can make market overreacts to the upside (PE close to 40 in 2000 tech bubble) or downside (PE <10 - great recession). Another example: Housing bubble in 2006 and housing is bad investment forever 2009-2011. That's when you really have to make a move and don't just sit still. You can make loads of money when you see the market overreacts. Right now, it's not the time to do anything...

I am a day trader, but I also buy long stocks, commodities. I think the best thing to do now is DO NOTHING unless your investment have gained 200% or more , then sell it and take profits.

From technical analysis, I strongly believed market is due for a 20% correction. This could happen this month, or by end of 2013. I sold most of my gains and put a lot of cash aside waiting for a correction to jump in. Now, I'm buying gold/silver miners, as well as gold/silver ETF, along with physical gold/silver.

Watch, next year, China could announce yuan to be a global reserve currency with gold backing....This is when the debt bubble bursts and all hell loose....lol....GOLD and SILVER , baby.

 

[xml2]

Now, I'm buying gold/silver miners, as well as gold/silver ETF, along with physical gold/silver.

Watch, next year, China could announce yuan to be a global reserve currency with gold backing....This is when the debt bubble bursts and all hell loose....lol....GOLD and SILVER , baby.

The rally for Gold and Silver is over. Watch it plummet, yet we still hear the gold bugs cheerleading. The world isn't falling by next year...

http://www.avaresearch.com/avanew/a...old-Analyst-Agrees-With-My-Views-On-Gold.html

 

[iworkjobs]

yes,This concern has already been priced in. This explains the drop this whole week.