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REDDIT

Why is it a bad idea to take your money out of the market if you are expecting a downturn?

E
Mar 14, 2025 · 17:23

Basically as the title states…

Let’s say you were 100% invested in VOO/VTI and decided to sell all of your stocks when Trump started levying tariffs.

Say you sold a little below the S&P500’s all time high of 6147.

You could hold out and wait for a bit and re-buy in if the price hits ~5000 for example. If it eventually goes back up to 6147 you just made roughly 20% more than people who didn’t pull their money out.

And if you are wrong, you can just throw it all back in when it reaches ~6000 and you basically end up doing no worse than people who never sold.

For tax-advantaged accounts (401k, Roth, etc.) the only negative I can see in this strategy is the loss of dividend payments… so keeping your money out too long is probably a bad idea. But keeping it out for a few months doesn’t seem like a bad move at all.

Can someone explain?