Transferring a retirement account between custodians is one of those mundane logistical tasks that triggers outsized emotional reactions. A caller named D recently phoned in to Talking Real Money with exactly that anxiety, telling host Tom Henske that “recently there was a big up day in the market and I had put in a ACAT transfer request from TIAA to Fidelity, and it didn’t go through,” and admitting “I know logically it shouldn’t make any difference outside of the time that the money would be out of the market, but it made me nervous.”<\/p>\n
Henske’s reframe is worth absorbing before you ever click submit on an ACAT request.<\/p>\n
Quick Read <\/p>\n
SPDR S&P 500 ETF (SPY) is up 8.86% year to date and 26.49% over the past year, with market volatility measured by the VIX ranging from 13.47 to 31.05 over recent months.<\/p>\n<\/li>\n
The timing of retirement account transfers between custodians does not meaningfully affect long-term investment returns since investors are equally likely to miss down days as up days during the transfer window.<\/p>\n<\/li>\n
The analyst who called NVIDIA in 2010 just named his top 10 stocks and SPDR S&P 500 ETF wasn’t one of them. Get them here FREE<\/a>.<\/p>\n<\/li>\n<\/ul>\n The “Miss Down Days Too” Reframe <\/p>\n Henske pushed back on the asymmetric framing investors apply to short transfer windows. “You gotta remember that you’re a long-term investor. I know that. And you’re as likely to miss a down day as you are up days,” he said, citing the rough base rate: “I think it’s 75% of the months are up and 25% are down. It’s about the same when it comes to years. It’s about 3 out of 4 years the market’s up and 1 quarter when it’s down.”<\/p>\n