Going defensive in a 401(k)

Submitted by RelevantToTheNameOf t3_z85z8c in personalfinance

Does anyone have any idea for how to go defensive in a 401(k) with limited funds available to invest in? It is with Empower Retirement, formerly MassMutual.

I can't go into cash or short the market or into a sector that I think is going to be bullish. What should I look for in the funds description to see if it's defensive? I would like to be a bit more active in managing my retirement funds.

EDIT: to close this out, once I actually tried to change my allocations, I was able to put 100% of my 401k into what's called a "General Account" which seems to be the same as cash. So I went into cash as of yesterday close. Let's see in a year how many gains I missed out on.

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Werewolfdad t1_iy9x1t5 wrote

You shouldn’t be timing the market.

> would like to be a bit more active in managing my retirement

Given your question, that’s realistically the last thing you should be doing.

Investing guidance: https://www.reddit.com/r/personalfinance/wiki/investing

401k fund selection guide: https://www.reddit.com/r/personalfinance/wiki/401k_funds

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RelevantToTheNameOf OP t1_iya3gm9 wrote

Thanks but I'm not looking for investment advice.

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Werewolfdad t1_iya3r3n wrote

I mean, if you can't figure out what mutual funds are, you certainly should be

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RelevantToTheNameOf OP t1_iya5kfc wrote

I don't appreciate the snark. I can have a view about the economy and the market direction. Maybe I won't have sick gains but why would it bother a commenter on Reddit if I don't know certain details about a specific retirement plan?

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Werewolfdad t1_iya8e7e wrote

Because I want you to be richer

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RelevantToTheNameOf OP t1_iyaha9k wrote

This is one thing I don't like about reddit.

OP: "Guys, what's the best way to peel an apple?"

Commenter 1: "You shouldn't be peeling apples."

Commenter 2: "Have you tried peeling bananas? They're a better choice."

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Werewolfdad t1_iyai2ft wrote

I mean this one this is more like “I don’t understand Texas Hold ‘em, should I bet $50 or $100 per hand?”

And the answer is don’t Texas hold ‘em because you’ll lose to the professionals

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MikeWPhilly t1_iyannxf wrote

I think you are missing his point. It’s more like:

OP - I want to protect my money.

Commenter 1) - Keep investing

OP - I don’t need investment advice.

Commenter 2 - You do need investment advice since you can’t figure out the safe funds which are specifically labeled. I.e. Mutual funds. This is literally a 10 second google.

OP - I just want to protect my Money

Commenter 1, 2, 3 - Keep investing you already took a huge amount of pain.

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Default87 t1_iyaaykv wrote

It sounds like you would be a great candidate to go 100% into the target date fund that closest matches your expected retirement year, assuming your 401k offers them (which outside of extremely small businesses, you most likely have target date funds available in your plan).

That will give you an appropriate mix of funds for your situation.

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DaemonTargaryen2024 t1_iybsm5h wrote

Think again
https://www.schwab.com/learn/story/does-market-timing-work

Those who flee to cash in response to short term market losses (after the market has already gone down by the way, locking in losses) have a far lower balance by retirement age than those who simply buy, hold, and keep buying through thick and thin.

You've conceded you don't know much about investments, which is okay. The people who frequent this forum do, and are telling you to reconsider "going defensive", as it's a data-proven losing strategy.

Good luck

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Mysunsai t1_iy9yopj wrote

What do you have available?

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RelevantToTheNameOf OP t1_iya3mk4 wrote

I'll have to check, but everything seemed to be a mix of stocks and bonds with a couple of stocks-only funds based on the S&P or the Russell 2000.

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