Limited 401k options

My 401K plan does not have a cash account option.  I would like to take my money off the table for awhile and wait for a good buying opportunity.   The whole buy and hold, dollar cost averaging thing is fine, but I think we are moving into entirely new territory.   The closest thing we have is a stable value fund that gaurantees  4.7% with wrapped GIC's.  It exacts a hefty 4 percent front load however.   I have given serious thought to cashing out.   Seems like I am caught between a rock and hard place, (ponzi scheme and inflation.) 

We manage several 401k and 403b plans for clients.  I am shocked that most plans do not even have money market accounts.  Or the "money market" account is really a super short term bond fund.

There should always be a cash account option that is not a bond fund...just cash.

When the next bear market is in full swing, people will wake up and realize just how limited their positioning ability is.  Trade restrictions and lack of choices will be magnified when alternatives to stocks and bonds are wanted.

Scott

I just posed the question to one of our 401K steering committee members.  I will write an update.  In the meantime my two non-stock options are: PTTAX Pimco total return A and Morely Stable Value fund.  Any advise?

The reply

"We have a wide array of choices already so I do not think we will add new categories – as the focus is on long term wealth creation.  But I will raise the issue at the next meeting"

Hmm.

LOL..."We have a wide array of choices..."

A wide array of choice would mean NON-correlating asset classes.  Total lack of understanding.  Put it to them this way.  I have choices for different flavors of stocks...but they are still stocks.  I have choices for bonds, but they are still bonds.  I cannot choose "cash" because it is just an ultra-short term bond fund.

If Morley Stable Value is the closest you probably have to a cash account.  PIMCO Total return has a good track record.  PIMCO has some penalties for less than 7 day positions.  Check on the Morley Stable Value account for withdrawal rules.

Currently we are net long, and heavier weighted to larger cap stocks.

Scott

Caddman

Thanks for replying.  I will hit them with the ultra short term bond line of reasoning.  

 I recently reallocated 63 percent of my 401K balance out of stocks into both the pimco bond fund and the morely stable value fund.   Is my, "sell it high, buy it low" premise sound?   They groom us to buy and hold - you know, "miss the three best trading days of your duration and kill your returns...don't worry, be happy!... you are getting very, very sleepy..."   

401k,

As far as selling high, we have our clients 85% long in large cap stock funds for their 401k accounts.  We still see the large cap stocks going higher, and dips should be bought.  If there are any changes, I will post.  But we are not selling yet.

Scott