I Pulled Out of the Stock Market, Here’s Why
The bear market is coming
What a week for the stock market!
I made some big trades last Thursday and Friday. These moves could make or break my year.
Before I continue, please understand that none of this article is financial advice. I am simply giving my two cents on the situation of the stock market.
Current Market Conditions
It’s a bull market currently! Things are going well for investors.
But how long will it last?
Why did I pick NOW to pull my funds out of the market?
The Dow Jones is now over 39,000 points. It is so close to 40,000 which is a big milestone. Milestones like that aren’t always good…
In fact, that milestone could be the start of a market correction.
I was also very satisfied with my earnings up to this point. I am okay with missing out on potential gains. I am hedging (protecting) myself from getting slapped by this next market correction.
How much did I take out?
70% of all funds
The remaining 30% stayed in the market.
Where did I get the 70% magic number?
66.67% wasn’t enough and 75% was too much. Based on those calculations, 70% was the sweet spot.
I feel good about the 70–30 split.
What did I do with the 70%?
I put the 70% into a money market account earning 5.25% APY.
Do I want the market to go down?
Of course not! I still have 30% of my stock market funds in the market. Why would I want the market to go down?
YouTube Video
I created a video on my YouTube channel that talks about this topic. Be sure to check it out:
Final Thoughts
I am okay with losing out on potential gains from the stock market. With money market rates so high right now, it’s worth taking a good chunk of my investments out of the market and just letting them sit in an account earning 5.25% APY.
Things would be slightly different if money market accounts weren’t earning as much money. If rates were around 2.50% APY for example, I probably would have taken out 55–60% compared to 70%.
I am basically guaranteed 5.25% APY on that 70% of money that I put into the money market account. The only way I wouldn’t receive that money is if the bank collapses and the FDIC can’t pay me out.
What are your thoughts on the potential bear market coming soon?
Are your eggs in more than one basket?
What is your investing plan?
Let me know your thoughts in the comments!
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