Anyone bailing out of their mutual funds?

[Think Different]

Just curious, am I the only one who cashed out their Mutual Funds today or yesterday, given the current market volatility? Normally, I invest and let it sit for years, with minor adjustments, but with what's going on in Greece, the 1000+ drop in the DOW yesterday, and analysts saying we're heading into a 10-year slide, I figured I'd pull out what I could quickly liquidate. My retirement IRAs/ROTHs are just gonna have to sit, since it's not worth touching them. Plus with more liquidity, I have that cash to get overseas quicker, if TSHTF.

[momopi]

I'll refer you to the MF experts, I recommend reading Taylor Larimore's posts:
http://www.bogleheads.org/forum/viewtopic.php?t=7059

His 4 fund portfolio:
Money Market Fund (Cash)
Total Stock Market Index Fund (VTSMX)
Total International Index Fund (VGTSX)
Total Bond Market Index Fund (VBMFX)

You put 25% into each and adjust once a year or whenever. If you're too lazy to do that, just buy something like PIMCO Total Returns Fund (PTTRX). See performance here:
http://finance.yahoo.com/q/pm?s=PTTRX+Performance

From 1987 to 2009, PTTRX only lost money in 1994 (-3.58%) and 1999 (-0.28%).

I put my money where my mouth is: at my current company I put my 401(k) into PTTRX.

[globetrotter]

The stock market is now a rigged game, a casino. Most volume action now is due to the major banks selling shares back and for using computers and front running HFT. The crash Thursday is something we will see more of as volume thins and retail investors flee the market.

I strongly recommend a cash and PM portfolio.

Swiss Franc
Japanese Yen
Chinese Yuan if you can get them
Silver
Some gold
Some Euros and USD
Free and clear income producing real estate if you can do it with very minimal debt
NO DEBT is idea

This will preserve your assets. Right now you want to focus on RETURN OF principle, not RETURN ON your principle.

This situation is unique in that we are transitioning from one Kondratieff Autumn to a Winter. These events only happen once in a lifetime and we are now up to bat. Once this passes then Momopi's advice will work, but not now.

I made 30% in 2008 when everyone else lost -45% and now I am in cash.

The 80% rally since March is all fake, pumped up by Bernanke printing money. The 1000 point 5 minute nosedive on Thursday proves that all bidding is by computer and it is all rigged to rob you, the retail investor.

Another possibility is .gov seizure of your 401(k) and IRA and forced conversion to speacial Treasury's 'to protect you and give you a guaranteed income'. Your assets will then be used to bailout federal and state unions' failing pensions and to prop up the US Budget.

[MrPeabody]

I bailed out before the market crashed several years ago and have been sitting in cash ever since. Getting 1 percent sucks but it was better then losing 50%. Professional traders have known the pullback would come for some time, but didn't know when. It looked like the Goldman Sachs scandel would initiate the crash, but the market quickly bounced back. But, this Europe crisis is just beginning - first Greece, next Portugual, Spain, followed by Great Britain and then California.

[momopi]

Another area to look at is self-directed IRA. You can roll your 401(k) and IRA accounts into self-directed IRA with checkbook control, invest in real estate, cattle, fish (!), or whatever and enjoy the tax-defer (IRA) or tax-free (Roth IRA) status. This method of investment is NOT for amateurs. Please read carefully and consult an expert.

http://www.penscotrust.com/

Note that Pensco Trust is one of very few self-directed IRA custodians that'd handle real estate investment outside of US ($1000 fee!).

[Contrarian Expatriate]

I bailed out before the market crashed several years ago and have been sitting in cash ever since. Getting 1 percent sucks but it was better then losing 50%. Professional traders have known the pullback would come for some time, but didn't know when. It looked like the Goldman Sachs scandel would initiate the crash, but the market quickly bounced back. But, this Europe crisis is just beginning - first Greece, next Portugual, Spain, followed by Great Britain and then California.

I too bailed out about 90 percent, but I've been inching back in over the last few years and made a nice profit in the recent run-up.

I too believe that this rally is temporary, so I am mostly in cash, bonds, and positive cash flow, pre-bubble real estate. I invest regularly into my 401K and IRA, and if the market crashes again, I will convert much of my cash into index funds.

The question will be how far down the market will go. Will it go down farther than March 2009, or will it simply test those lows? No one knows so incremental jump-in's at each 20 percent drop will be my strategy.

[globetrotter]

Be careful with the IRA and 401(k). Rumors repeatedly surface that the US .Gov will first require a mandatory US T option on all IRA's, then one day they will 'suggest' that everyone's 401(k) is converted to special T Bonds so as to guarantee an annuity and the .Gov will hold your funds in trust for safe keeping.

Of course what is going on is that the Gov't is broke and will seize your money to pay for a year of the budget, maybe two. SEIU and other unions pensions are far underfunded and the annuity trick will allow them to pool your assets to pay off pensioners who are entitled to $100k a year in retirement benefits with full Cadillac plan medical.

I liquidated everything 2 years ago and took the tax hit and went to cash. Yuan, Yen maybe some CAD or AUD.

[MrPeabody]

Be careful with the IRA and 401(k). Rumors repeatedly surface that the US .Gov will first require a mandatory US T option on all IRA's, then one day they will 'suggest' that everyone's 401(k) is converted to special T Bonds so as to guarantee an annuity and the .Gov will hold your funds in trust for safe keeping.

Of course what is going on is that the Gov't is broke and will seize your money to pay for a year of the budget, maybe two. SEIU and other unions pensions are far underfunded and the annuity trick will allow them to pool your assets to pay off pensioners who are entitled to $100k a year in retirement benefits with full Cadillac plan medical.

I liquidated everything 2 years ago and took the tax hit and went to cash. Yuan, Yen maybe some CAD or AUD.

I heard this too. I only have 5% of my portfolio is IRAs and 401(k)s because I was always uncomfortable with the thought of not having full control over my money. You are also restricted in your investment vehicles, for example, you can't short, although you could now buy short ETFs. If the government makes you take an annuity at 1% interest, with you being stuck with high inflation and nowhere to go, your money has been effectively confiscated. And keep in mind that the new Supreme Court justice nominee has had associations with Goldman Sachs, so don't depend on the Constitution to protect your property.

[Contrarian Expatriate]

Be careful with the IRA and 401(k). Rumors repeatedly surface that the US .Gov will first require a mandatory US T option on all IRA's, then one day they will 'suggest' that everyone's 401(k) is converted to special T Bonds so as to guarantee an annuity and the .Gov will hold your funds in trust for safe keeping.

Of course what is going on is that the Gov't is broke and will seize your money to pay for a year of the budget, maybe two. SEIU and other unions pensions are far underfunded and the annuity trick will allow them to pool your assets to pay off pensioners who are entitled to $100k a year in retirement benefits with full Cadillac plan medical.

I liquidated everything 2 years ago and took the tax hit and went to cash. Yuan, Yen maybe some CAD or AUD.

I just don't find it feasible that the US Government would sell my securities and buy US Treasury securities without my consent. The IRA and 401(k) are vehicles for securities, not securities themselves.

In the oft chance of that happening, there would be advance notice in the form of Congressional debate. That is the period at which I could sell my IRA holdings and place the cash in another vehicle.

[globetrotter]

Just as I would not find it feasible that all trades last Thursday 2:40 - 3:00 were cancelled, or that the FASB has been captured by the banks, or that all mortgages are effectively not enforced, or that 23% of mortgage holders are not paying and going out to dinner with the money.

It isn't your money anymore and TPTB have been treating it as such for 2+ years.

[momopi]

Fitch finds Calif. at both extremes in mortgages
(AP) – 1 day ago

NEW YORK — California has the best-performing U.S. region in mortgage performance as well as some of the worst, according to a study by Fitch Ratings.

Results of the ratings agency's study of all securitized non-agency California mortgage loans were released Wednesday.

Among the findings, it said the Bay Area region of San Francisco, San Mateo and Redwood City has a 60-day mortgage delinquency rate of just 4 percent. That was No. 1 among the 382 metropolitan statistical areas tracked by Fitch.

Recent price trends have helped. While California home prices are under stress and further declines are likely, San Francisco home prices have increased by 12 percent over the past year.

At the other end of the spectrum is the Riverside-San Bernardino-Ontario (Riverside) region, at 367th among all U.S. metro areas with a 60-day delinquency rate of 23 percent. Ninety percent of Riverside mortgages are now "underwater," Fitch said, and nearly 60 percent of borrowers owe more than 150 percent of the value of their homes.

Fitch said California mortgage trends are important for both new and existing securities in the rest of the nation, since the state has about 40 percent of overall mortgage origination volume.

Copyright © 2010 The Associated Press. All rights reserved.