Not wanting to make this political, just seeking honest advice about retirement/401K investments risk/reward/potential loss.
I am 55 and plan to retire early in a few years. Am I correct in thinking the market will take a huge dip now...or possibly fall back into recession-like trends? My retirement funds are currently almost %100 in the "risky" categories. Should it be moved into guaranteed interest (low risk)? The only reason the market would be ok for the next few months is due to the vaccine. That is my thinking anyway. None of the market analysis junkies that I have talked to can give me anything that gives me peace of mind on the situation.
If you really want to learn about asset allocation for yourself, earlyretirementnow.com would be a good place to go, specifically here:
https://earlyretirementnow.com/2017...e-withdrawal-rates-part-19-equity-glidepaths/ for a start on your question on asset allocation. But after that, look at more of the beginning articles than the later articles as after he covers the basics, he gets into issues that are either less relevant or more nuanced than most people are going to want to get into.
The blog (or at least the early part) really focuses more on safe withdrawal rates (i.e., managing your money so you get to spend the most each year without risking running out of money), and asset allocation is just one of the things he looks at tweaking in order to maximize the safe withdrawal rate. But I assume you're only asking about asset allocation because you want to maximize your safe withdrawal rate. If you have a nest egg compared to your lifestyle that the safe withdrawal rate is basically irrelevant and you just want to focus on maximizing the amount left for heirs, then that website probably won't be as applicable although it still might help in understanding concepts.
But beyond that, as others have said, nobody really knows what is about to happen. If they do, they're probably not giving away that info for free. Biden's policies (or really, the policies of the more extreme leftists that seem to control the party) are definitely going to be bad for the economy, but while policy is important, it's not the only thing that matters in the short term. We could (and have) had continued short term growth while implementing bad policy. Also, as long as we're running trillion dollar deficits, we will either have asset inflation or just general inflation, one of which is "good" for stocks, and one of which at least makes stocks better than "safer" alternatives.
If you don't dislike your job and are healthy, I'd really consider how big of a hurry I'd be in to retire. I know people are always pointing to something as the next big thing to worry about, but with a few exceptions that aren't really big enough to be sheltered from the bad decisions of other countries, basically the whole developed world is running deficits and has politics that would seem to indicate it's going to continue until it can't, and also have demographic challenges as far as reproducing below replacement rate. Working a couple of extra years to have an extra year or two of expenditures in cash or investments seems like not a terrible tradeoff if you are generally satisfied with your job.
ETA: Speaking of, hadn't checked that site in a while and the most recent post in on how much safety you get historically from working one more year.
https://earlyretirementnow.com/2021/01/13/one-more-year-swr-series-part-42/#more-62572
