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Where should I move my 401(k) gains before the bull stock market ends, in preparation for a market crash?

My 401(k) accounts do not have the option to automatically sell at a stop point. How do you recommend that I lock in my gains before the bull stock market ends? Is it better to move my gains into my 401(k) money market or move them into my 401(k) defensive stock option (for example, a utilities fund)?

401(k), Stocks
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November 2017

Making investment changes based on “fear” or “greed” will typically end in failure...unless you have a very disciplined investment plan.  If you lock in the gains now and move to something defensive, how will you know how and when to re-engage your portfolio allocation.  Moving to a money market or fixed account will make you feel good in the short term, but most that do that (without a discipline) will end in faluure...by staying in cash and missing the next market upturn.

That being said, if you want to be able to quickly make a change, I sometimes suggest to a client to pick one of the “lifestyle https://www.investopedia.com/terms/l/lifestylefund.aspfunds”  or “age-based” funds in your 401k.  This will keep you diversified and allow you to move more conservative or aggressive with less mistakes...as these funds have a good compbination of stocks and bonds.  You can move to a more conservative option now (and then be in one fund) and when you feel that the correction is over, you can move back to your current allocation or to a more aggressive fund with just one trade (easier)...but the real question is when and how to do it...as by the time it feels “good”, you will have most likely already missed the move.

If you are not sure what to do...and don’t have a strategy, check out some of my articles:

Afraid of Retiring in a Bear Market

What to Do if the Market Tanks in 4th Quarter

Retirement Survival Guide

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