None of the U.S. examples would've been a big deal. You're gradually investing, not adding a huge lump sum at once. In fact, the top of 2007 would be good, because you'd continue to invest during the 2008 crash then recover everything else plus a lot more in a few years. Japan has been a different beast. We haven't seen anything like that in the U.S. since the Great Depression. Technically, it took 25 years or so to recover from the Depression, but dividends were higher then, so if you reinvested dividends, you recovered a good bit faster. https://investment-fiduciary.com/20...our-retirment-in-a-recession-even-depression/ But again, in a 401k, you'd be investing as the market dropped 40, 50 and up to almost 90%, then getting the gains on the way back up. They weren't around in the Depression, though.
Someone else doesn't understand a 401K. If the market crashes 40, 50 or 60%, he continues to invest, and has a pretty low average price per share.
He should do both. In fact, an early start on retirement savings is probably worth more than a salary bump.
Each company 401k is (likely)different... I'll admit the word MUST in my response was inaccurate, if you enjoy the headaches of multiple accounts each with the same purpose. And for some companies, the rollover out may have it's own set of fees and rules. Of course, nowadays, all these things MUST be disclosed. OK. Each is different. Generally, investment options in 401k's are limited. And in many cases, management fees are above average. The company match is the big deal with a 401K. Other features such as investment choices and fees in many cases can be bettered and the tax advantage can be replicated though self-directed vehicles.
Smart money has a much shorter time horizon. From his perspective, adding a few hundred dollars to the market every month and holding for 30 years, the entry price does not make that big of a difference. They are spot on. A 28 year old has plenty of time to compound out of pretty much any crash and still be ok for retirement. A guy who might retire next month has very different risk preferences.
These are fair points. All I'm saying is if the fellow here feels uncomfortable buying into this 10+ year rally, there are other alternatives. Heck, buying bonds is probably less nerve recking than waking up at 2 am everyday to check how the ES is trading relative to Asia / Europe and how it's gonna affect one's SPY holdings .
heavenskrow, I invest in my company 401k as well. Please start investing as well for the free cash and long term wealth. It does not matter if you start buying near the lows are high. Just start and consistently do it. I started in 2008 and never looked back. Never even think about it.
You better get started buddy and quit goofing off. Play with this and forget this buying at top stuff and just get start. https://www.portfoliovisualizer.com/backtest-asset-class-allocation Women lie, Men lie, but the motherfucking numbers don't lie. I am long and strong 100% total stock market in my 401k.