So, I stumbled across this juicy little debate on Reddit the other day, and it’s got me thinking. Imagine it like this, a couple’s sitting down, probably over coffee or maybe a cup of tea, hashing out what to do with their investments. They’ve got 10% in cash, 20% in bonds, and the rest chilling in a money mutual fund. The wife’s like, “Hey, let’s just leave it alone, ride it out.” But the husband? He’s got this itch to sell 70% of it, stack up the cash. He wants to wait for some big market correction/crash to swoop in like a hero.
The wife is calling it a terrible idea, timing the market’s a gamble, right? The husband is about to shake things up because he feels the market is going to offer an opportunity. But on the flip side, the wife thinks that uncertainty’s in the air, and it’s got them at a crossroads. So, what would I do? Let’s break this down together.
What I think of this dilemma
First off, I get where they’re both coming from.
The wife’s vibe? It’s my kind of jam. I’ve been playing this stock market game for over a decade now, building my own portfolio brick by brick, and one thing I’ve learned is that patience is your best buddy. The market’s like a moody teenager, it’s gonna throw tantrums, slam doors, and make you question everything.
But over the long haul? It tends to grow up and get its act together. That’s why I’m usually the “let it ride” type. If you’ve got a decent mix like they do, some cash, some bonds, and a chunk in a mutual fund, you’re already set up to weather a storm without losing sleep.
But then there’s the husband’s side too. I can’t totally dismiss it. Wanting to sell 70% and sit on cash? That’s a bold move. He’s probably staring at the headlines, inflation, interest rates bouncing around, maybe some geopolitical mess, and thinking, “What if we’re on the edge of a cliff?”
I’ve had those moments too, where you’re tempted to hit the eject button and wait for a better deal. The idea of cashing out and buying back in when stocks tank sounds sexy, like you’re some Wall Street wizard.
What’s the catch
It is a big one.
Timing the market is like trying to predict when your dog’s gonna steal your sandwich. You might get lucky once, but most of the time, you’re just left hungry.
Let’s dig into their setup a bit.
- They’ve got 10% in cash, which is a nice little cushion. That’s enough to cover emergencies or snag an opportunity without scrambling.
- The 20% in bonds? Smart move. Bonds aren’t also the rockstars of the investing world, but they’re like the reliable friend who keeps you steady when stocks are freaking out.
- And the rest, 70% in a money mutual fund? I’m assuming they mean a money market mutual fund or maybe a typo for a broader mutual fund (I’ll assume that it’s a typical large cap equity mutual fund). Either way, it’s probably a safe-ish spot, maybe not growing gangbusters but not cliff-diving either.
It’s a balanced vibe, and honestly, it’s not screaming “panic and sell” to me.
Now, if the husband gets his way and they sell 70% of this to go heavy into cash, they’re flipping that balance on its head. They’d end up with, what, 80% cash and just 20% still invested?
That’s not investing anymore. That’s hiding under the bed with a pile of dollar bills. Cash is great for peace of mind, sure, but it’s not working for you. Inflation’s been a sneaky little thief lately, chipping away at what your money’s worth.
Sitting on that much cash while waiting for a “major dip” could mean missing out on gains if the market decides to climb instead. And let’s be real, how do you even know when the dip’s dipped enough?
I’ve seen folks wait for years, cash in hand, only to realize they missed the train.
So it means, the wife is right?
On the flip side, the wife’s “wait and see” approach isn’t perfect either.
Doing nothing can feel like you’re just crossing your fingers and hoping. Markets don’t care about your hopes, they do what they do.
But here’s why I lean her way. Their current mix already has some built-in shock absorbers. If a dip comes, that 10% cash and 20% bonds can soften the blow. They are safe. The money mutual fund might take a hit but probably won’t crater. Plus, if they’re in this for the long game, and I’m betting they are, since they’ve got a portfolio to argue over – history’s on their side.
Stocks, over decades, tend to climb. Not every year, not every month, but over time? Yup.
So, what would I do if I were in their shoes?
I’d stick closer to the wife’s plan.
I wouldn’t just sit there twiddling my thumbs.
I’d take a hard look at that mutual fund, is it doing its job?
- If it’s a money market fund, it’s probably safe but sleepy. For me, the growth that this type of mutual fund will give me in long-term is not acceptable. I would rather feel comfortable in an S&P 500 index fund.
- If it’s a stock-heavy mutual fund, I’d check what’s inside. Are the holdings solid companies that can handle a rough patch? If it’s looking shaky, maybe I’d tweak it. I’ll shift some into a low-cost S&P 500 index fund. I may also consider partially cashing (say 25%) and wait for the correction. In case the correction comes, I’ll buy S&P 500 at those bottom levels. I’ll do Nothing drastic, just a tune-up. The cash and bonds? I’d leave them be. They’re doing their job as the safety net.
Conclusion
Here’s a little story from my own playbook: back around 2018. I got antsy when the market started wobbling.
I thought about selling a chunk of my portfolio and waiting it out. But I held tight, kept my mix of stocks and a little cash, and guess what? The market dipped, sure, but then it roared back. If I’d jumped ship, I’d have missed out on some serious growth.
That’s not to say every dip ends in a party, 2022 was a brutal reminder that losses happen, but bailing out big-time usually leaves you regretting it.
If I were chatting with this couple over that coffee, I’d say this: “Hey, you’ve already got a solid setup. Don’t let the craziness out there spook you into overreacting. Timing the market’s a sucker’s bet most of the time, even the pros mess it up. Keep your eyes on the long term, maybe tweak things if they’re off, but don’t turn your portfolio into a cash fort just because the world’s loud right now.” To the husband, I’d add, “I feel you, man. Uncertainty sucks. But cash isn’t king forever. It’s more like a quiet sidekick. Let your money keep working.”
What do you think? If you were them, would you hold steady or cash out? Drop your take in the comments – I’m curious.
Have a happy investing.
