So I have a 401k through work. Suppose I thought the market was due for a short term dip, am I subject to the equity wash rules (and can someone explain this in detail?) if I tranfser from my funds to the short term stable value fund? I don't see a way to "go to cash" as an option.

If I am subject to the rule(s) and can't buy back out of the stabke fund for 90 days, is it worth it to move from the equity funds to the treasury or other fixed income type funds that should be less affected by a market downturn?

Can't you put it all in a mm or settlement fund at 0.01% interest?

jamaggie06 said:

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So I have a 401k through work. Suppose I thought the market was due for a short term dip, am I subject to the equity wash rules (and can someone explain this in detail?) if I tranfser from my funds to the short term stable value fund? I don't see a way to "go to cash" as an option.

If I am subject to the rule(s) and can't buy back out of the stabke fund for 90 days, is it worth it to move from the equity funds to the treasury or other fixed income type funds that should be less affected by a market downturn?

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Wash rules wouldn't be an issue in a 401(k). Trading in a 401(k) doesn't lead to capital gains or losses. It's possible the fund you sell out of will not allow you to repurchase it within a certain timeframe, however. American Funds are known for this.

That said, most financial advisors would warn you not to attempt to time the market.

Also, the stable value fund is the closest thing you will have to cash. Actual "cash" is not an option. It will either be called a money market mutual fund or a stable value fund.

Yes. Thats what i thought, MM "stable" fund is my only choice.

I guess I'm just concerned. We've seen a hell of rally lately and a pullback seems probable in the mid to near future.

jamaggie06 said:

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Yes. Thats what i thought, MM "stable" fund is my only choice.

I guess I'm just concerned. We've seen a hell of rally lately and a pullback seems probable in the mid to near future.

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The S&P 500 has averaged a 14% intra-year decline each year over the past 90 years. You should always expect a pullback.

Despite that, no one consistently times the market correctly. If you get out and the market runs up another 20% are you going to stay out? On top of that, if the market falls (which it absolutely could) at what point are you going to buy back in?

Make sure you have a plan to handle whatever market scenario materializes before pulling the trigger.