401K LOAN

Is a 401K loan a bad idea?  It seems safe to me.  Borrow money from yourself and pay yourself interest?  The market has got to be peaking right about now.  So if I take some out now while it is high,  I wont lose much when it drops back below 10000 points?  Any truth to this or am I just dumb...

only if there is absolutely no other alternative...please don't do it if you can swing this any other way  

Johnny,

 

I do this all the time when the markets high.  Then I'm averaging back in hopefully lower plus the interest.  I then use the loan money too have a God Damn Good Time

i dont need the money.  i just thought i could double dip some how.  and not lose if the market dropped well under 10000 points.  just was thinking i would not lose as much pay my self a little interest and get everything back at the lower mnarket rate.  

This is just crazy.  If you want to reduce your market exposure just change your investment mix in the 401k...no need to withdraw or loan.  Sometimes people just have the wackiest ideas.   

whats a good book?  I dont know anything about the market.  

Read anything by John Bogle...   Diversify, Diversify, Diversify.   The 3 principles of investing.     Your borrowing scheme is not the way to go . 

.......And if you don't know anything about the market.... the last thing you should be doing is trying to "time it"

rush where in ca are you

basketball must be kicking your ass

but honestly.... i would only take out if it was emergency.  no one knows your situation so it's hard to say.

i dont play basketball only football.  so i dont owe any bookie or nothing like that.  i was just bored and fulling around on my 401k website and was looking at balances and things to do and saw the loan.  so i clicked on it and i just thought it was a way to double dip.  then i read about it and it says when you cash out at retirement they tax the interest you pay yourself back.  so now i think i will just sit back read a book and maybe move some of my investment options around.  i get 2 or 3 moves a year on there.  

I thought he needed the money my bad.  A good strategy is going half cash then Dollar Cost Averaging back in over 6-12 months when the market is at a peak.  Right now isn't a bad time to do so.

What exactly is dollar cost averaging?????

It's a strategy where you automatically invest the same dollar amount every interval with your mutual fund company.. whether it be every month, bi-monthly, quarter, etc..

It's a good good strategy because it takes the emotion out of investing.  You buy more shares when the market is down, and less shares when the market is up.....  emotions get the best of most folks and they end up doing the exact opposite..

Having a regular withholding from each paycheck to fund your 401k is essentially dollar-cost averaging and is what most people do.  If you're young and investing 401k for long haul I think it's just best to just do this and not try to time the market.  Just do one of the target date funds and leave it and forget and add to it (10% or 20% or whatever) each paycheck and forget about it.  That's what I've done and it's doing pretty good lately.