[USER]

At which time I’ll get about $40,000 annually. I’ve invested heavily in the stock market over the years and have about $1 million in retirement funds.

I was aggressive over the years but the last year I checked more often and lost about $250,000. I won’t need it?

honestly when I retire since I live frugally or life happens and I do for children and/or health issues.

I’ve become scared of the market now and have gone all cash with my investments the last 4-5months and am scared to get back in but am greedy for more gains!!

Any words of wisdom?

[Matthew]

Well… you’re loosing roughly 1M every 7-10 years now because you’re in cash… the ultimate wealth destroyer.. one’s self.

[Aaron]

I’d recommend not changing to all cash because of market fluctuations. That’s going to result in a negative situation where you are buying high and selling low . If you have 11 years to go I’d suggest letting things ride.

[Matt]

Shouldn’t have sold. S&P is up 9.6% year to date. In your case that could’ve been $96k.

Once you get closer to retirement you switch over to a more conservative portfolio including bonds.

[Colin]

All cash 11 years out from retirement is a terrible idea. All cash at any point is a terrible idea

[Stephanie]

You had a on paper loss that you made real. Get in and stay in. Trying to time the market is never a winning strategy.

[Tony]

Stop timing the market. You’d never have that $1m if you did. You have 2 annuities already. Your pension and soc sec. This is why you should stay aggressive on other investments. That balance should have already told you that staying aggressive works. Why aren’t you getting the message?

[GE Adam]

Sounds like you understand the rational answer is to stay in the market. But you’re having a fear-based hesitancy. So, maybe take some time to think through your mindset and how you might reframe your situation. Couple of questions you might think through. 1) how much are your annual expenses (now and projected)?

This answer will help you see how much beyond the $40k pension you will need annually. 2) how much of the $1M (orig) or 750k (now) was your investment and how much was growth? While realizing a market loss that would have been only a paper loss stings, remember that any growth beyond your original investment wasn’t really yours (gains on paper), therefore if you still have all of your principal, you’re not behind where you started.

Depending on your answers to these questions, you might take your principal and invest it somewhere more conservative and within your risk tolerance and take the remainder of the 750k that was purely growth and invest that more aggressively. This idea is based on my assumption that much of the 750k is market gains, not principal.

I’m not a financial professional, so take my thoughts as just that — and coming from someone who was initially very risk averse and took many years of watching my money do almost nothing before I learned more about the market and risk.

[Author]

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