Why risk it? (Mr. Redding this post is for you)

Mr. Redding didn’t ask the question, but I did promise him that I would write scenario up.

Often I hear people say, “Why risk your retirement account in the stock market an risk the wild swing”? Do you consider the moves in the stock market since Monday wild swings? Let’s see, Since last Friday we are down 2.75% in the C-fund, 3.71% in the S-fund, and 2.65% in the International fund. That pretty much wiped out all the gains for the last two weeks. Sounds pretty bad doesn’t it?

So let’s look at this risk and see how it played out following the trend. I have been in the C and S since 11/22/11 and the I-fund since 1/26/11. I rode the last few days down but did it really hurt me? If I would have played the I do not want to risk it since last November, I would have been in the G and made a grand total of $3342.00 in interest. Not bad! But here is the other numbers that make it all good. At my peak, I had a gain in interest of $65,129.00 and since Monday I gave a bunch back but that still left me a gain of $44,169.00.

So who cares about those big swings if you can get the majority of those profits and keep them. I would much rather have $44,169.00 deposited in my account, than $3342.o0. I agree, it is dramatic to watch those big swings, but as long as I beat that G-fund, what difference does it make.

Today I bailed out of the C,S, and I-fund, and jumped into the F-fund and I will wait an see what the market is telling me to do next. Right now all my charts are saying we are heading south. Toward the end of the trading day today, things started to turn toward the green, but the overall picture looks bad. Hopefully it is just a hiccup and soon we will be back on the uptrend. We need a nice little correction to get the sidelines money into the market.