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Savage_X t1_j39cd7h wrote

Reply to comment by CertifiedBlackGuy in Nonfarm payrolls rose 223,000 in December, as strong jobs market tops expectations by caesar____augustus

Point being, it made little difference what you were invested in. Bonds got killed in 2022 because rates changed so fast.

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CertifiedBlackGuy t1_j39dnk2 wrote

But your losses (factoring in inflation on top) would still have been less than if you're still heavily in the stock market.

That's my point. You can't react to a sudden economic crisis, but there are ways to mitigate loss.

Funnily enough, your analogy regarding cash is absolutely wrong in this case. Someone who had their entire 401k moved to cash in 2021 would be doing better than someone who's 401k was mostly stocks.

And a realistic middle ground: a heavily stability oriented portfolio would be somewhere in the middle.

The value of my 401k today is 3 grand less than what I put into it (37k vs 40k), imagine what losses others are feeling that could (and should) have been mitigated by age-based rebalancing.

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Savage_X t1_j39f927 wrote

Bonds lost inflation adjusted 20% last year. Stocks lost inflation adjusted 25%. Its a little better, but retirees had few good options.

> Funnily enough, your analogy regarding cash is absolutely wrong in this case. Someone who had their entire 401k moved to cash in 2021 would be doing better than someone who's 401k was mostly stocks.

Not sure how I was wrong when that is what I said :) Sitting in cash and "only" losing the inflation amount was the best investment. Which is still crappy, and only can be a considered "good" in hindsight.

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CertifiedBlackGuy t1_j39i6ci wrote

Ah, I misinterpreted that, my b¯\_(ツ)_/¯

I cede that level of knowledge of the market to you. I yolo'd my own money in 2020 and made a stupid return, but that was money I was willing to lose. My own non-401k investment set up is far more conservative. I think it’s 40% lower yield, higher stability with some dividend paying stock as a buffer to the remainder growth-oriented stocks and ETFs. I forget the exact make up, but it was set up this way when i made it.

My point was more that I know people who never adjusted for age or retirement goal on their 401k. The values might have been lower, but I imagine it'd still be higher than at present.

But I also recognize the last couple years sucked for everyone. And it's why, in general, I am a strong supporter of stronger social safety nets. The idea of sustaining myself on my 401k sounds like a pipe dream. Especially if the new standard is once in a generation economic crises every other year

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