So, how about your 401K, IRA, Roth, etc. for a change of venue?
Are you cashing in? Are you sustaining the beat up?
What’s your plan?
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We’re not exactly hearing folks singing: “If I had a 401(k), one day I’d have a million dollars.”
Reaching seven figures in savings is not a slam dunk for most households.
About 150,000 people had $1 million or more in their 401(k) balances at Fidelity Investments as of the fourth quarter of 2017. It’s a record number and up from 93,000 for the same time period in 2016. It’s a tiny fraction — less than 1% — out of 16 million 401(k) accounts.
Another 152,000 people had $1 million or more in their IRAs at Fidelity. That’s up from 109,000 a year earlier.
The average 401(k) balance at Fidelity reached $104,300 with the average IRA balance reaching $106,000 — both record highs.
People buying here, after 6 years of incessant rise are probably late to the party; seeing a lot of emotional buying, and history is known to have punished emotional investment decisions (fear/greed) !
You misunderstand the saying. No need to change your approach in a fast changing environment. So if you have been buying 1 SFH in Austin, just continue to do so regardless of condition of economy and stock market.
Chasing, FOMO are emotional biases driven by fear/greed rather than rational thought. Buying in 2018 equates to chasing and fomo behavior IMO. There is always a peak frenzy before the crash and I feel in bay area real estate the current buyer frenzy is reflective of that.
You can say the same thing about buying in 2013. I had to compete against 16 other buyers with a 20% overbid for one particular home. I also bought that home based on chasing and FOMO. Home value has gone up more than 50% since then.
Speculation
Many market crashes can be blamed on rampant speculation. The Crash of 1929 was a speculative bubble in stocks in general. The crash in tech stocks in the early 2000s followed a period of irrational speculation in dot-com companies. And the crash of 2008 can be attributed to investor speculation in real estate (and banks enabling the practice).
The point is that when irrational euphoria about a certain asset class or industry exists, it’s not uncommon for it to end very badly.
