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Comment by godzillabrennus | Hacker News Reader

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godzillabrennus·

Cash out. Wait for the bust. Buy back in.

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One thing I've learned from HN over the years - be sure to ignore all financial and medical advice!

And what about if the majority of that is in a 401k?

Same applies. Change allocation to cash. Then change back after crash.

The trouble with switching to cash is then you've got to pay income tax on the capital gains. You'll be buying back in with less (proceeds - taxes).

Investment funds will offer a cash investment option. This invests in currencies. Along with government bonds it's considered low growth low risk investment.

Nobody would advocate actually withdrawing from an investment account. Just move it to safer investment options.

Moving it incurs capital gains taxes.

Even if you passively invest in a mutual fund, the funds internal transactions show up as capital gains that get reported to the IRS, and you have to pay the tax.

Not if it is in a tax deferred retirement account: there are no cap gains incurred by reallocating or NAV distributions unless there's an actual cash withdrawal. This is specific to 401ks & traditional IRAs only.

You are woefully misinformed. I hope you have not been keeping money in a particular 401k fund because you thought you couldn't change the allocation without paying taxes...

Not if it's in a 401k.

I don't necessarily agree with the market falling, but there is no reason you can't move your 401k indexes into a cash position at the brokerage and rebuy later. Not that I think thats a good idea

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