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What Would You Do If You Were Certain?

C
May 1, 2025 · 19:43

What would you do with a 401k that has say $250k in it if you could see the future and were 100% certain the market was going to drop around 30% in the next couple years. Keeping in mind the only goal here is to simply maintain the relative value of the $250k balance. I understand that inflationary pressures will likely make the actual purchasing value of the $250k less as costs rise so let’s assume 5-7% yoy inflation, meaning that even maintaining $250k balance will come with a 10-15% drop in actual wealth. Short of having a crystal ball and timing the market exactly right, is there a place to park this balance that will reduce exposure to a declining market but also mitigate the inflationary losses that would be associated with converting to cash? I understand that over time, being in the market generally has a much higher upside than not, but let’s assume that in this scenario, the investor in question does not have the time to wait for a market recovery.