The idiot financial expert they had on the Today Show this morning gave this advice: “Sell everything and get out of the stock market today. Stay out for 4 to 5 years.”
Seriously, (Cramer is his name IIRC) he said this.
There’s nothing wrong with taking some money off the table by selling some equities, even at a loss.
If the market goes down another 20% or more, you’ll be happy you had this money safely on the sidelines. If the Dow drops to 6000, you’ll be even more relieved.
Three percent returns in cash are much better than 30-50% losses in stocks. That being said, I understand that people with 401-k’s often have limited options in regard to moving their money around. If a company matches their contributions, it’s an even more difficult call, since they’re not losing nearly as much at the moment as the retail investor with a brokerage account.
There’s also the possibility that we’re close to bottoming, and a huge rally will ensue shortly. But I don’t feel very confident about that at the moment. So I suppose it depends on your time horizon. If you can’t sleep at night with these continual declines, shelter some of that retirement money and get back in later.
As far as Cramer is concerned, stay far away from him. He’s part of the problem.