Quote:
Originally Posted by ptgatsby
No... and no one can. Do not, under any circumstance, let what others tell you factor into what you decide. No one knows.
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It's basically good advise. It's very true that no one knows. But we can look to the past for similar situations. A very similar thing happened in Japan. They had an explosive economy right to end of the 80's, then their bubble burst. They experienced what is known as a triple waterfall decline. Their recession lasted a good 15 years or more, not sure if they even ever came out of recession. I've not kept track of the Japanese economy for a couple of years. The thing to note was that it was the bursting of their real estate bubble that sent their economy into that deep recession.
Japan is a manufacturing economy. The last I read manufacturing was 50% of Japanese GDP. The US Consumer is approximately 70% of US GDP. The Japanese were financing their economic expansion with rising commercial real estate values. We were fueling consumer spending with rising residential real estate values.
What does this mean? Can't really say. It could be bad. If you are worried, a good strategy might be to take half of the table, meaning cash in half of your 401k.