Jason Zweig

And that means that you can't lose all your money because you didn't put it all in the market.

if the market goes down.

But if the market goes up, you'll at least make something because you're not out of it entirely.

Yeah, so it's a great question with kind of a complicated answer.

So I think the problem with that approach is

is taxes and trading costs.

I mean, every time you sell it again, the government is going to take a piece of what you got.

And that's just not...

a good idea over time because it takes such a bite out of your... 15%, right?

Yeah, exactly.

And it's better to leave the money in there and let it compound than to try to take it out and...

put it sort of hold it back and then put it back in.

Because if you've just lost 15% of your money to capital gains tax, that means that you have to make

almost 20%, roughly 20%, just to break even after paying the tax.

And if you do that over and over again, it's very difficult to make that work.

Well, we know markets can go down and will go down.

Yeah, exactly.

So the 401k wasn't devised until about 1980, but it's been around and has grown to a multi-trillion dollar marketplace over the ensuing decades.

But just think about it for a minute.

You know, the market crashed between 2000 and 2002.