Quote from @Carlos Ptriawan:
Oh btw one more disadvantage of any gov. sponsor investment account inc. 401k:
So let's assume we're very smart, okay... so we know the stock market is going to crash starting from let's say tomorrow ; with a regular brokerage account I can sell my whole portfolio to cash (without withdrawal) or hedge the entire portfolio (eg if I'm vulnerable to 100% SPY I can convert to 50% SPY 50% SDS so they're delta neutral).
How do I know if market going to tank ? it's easy. What do you expect will happen if Powell said" we want to destroy the economy? " With 401k I can't even sell/hedge. If I convert to bond, the bond crash as well hahaha... it's a total joke. So I've to wait forever until this bear market recovers.
Some corrections: 401k-type offerings are not government sponsored, with the exception of the TSP. 401ks are between the individual, their private employer, the trustee/custodian, and the elements of the offerings (stocks, bonds, ETFs, mutuals, etc.). Same with 403b, 457s, traditional SEPIRAs, Roths and similar benefits packages. The only way in which the government is involves is the set of rules laid out by the IRS.
Collectively, these programs are all designed to encourage and reinforce long-term savings and investing; day-trading and 'timing the market' are not expected management elements. While there can be some parallels between overall market performance and government/FED. Powell never made the comment quoted -- material similar to that is bandied about on alt-right and neo-con media, but it's a purposeful misrepresentation of his comments to stir things up.
I'm not a fan of Powell -- he was cowed into reversing needed rate maintenance and QE selloff in 2019 that would have softened bubble status that still remains in markets. However, his commentary about maintaining rate hikes and selloff has been consistent all summer such as this from June, “We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.” Had we been 100% SPY (3818) at the end of June after these 'scary comments' and remained 100% not trying to time the market, we'd be at 4110, 7.6% up in 2.5 months.
There's no doubt the bubbly paper investment markets will fluctuate -- but not necessarily because of FED action. This is hardly a disadvantage for using 'retirement' investment tools if one is diversified and using long-term horizons. Precisely the same can be said of this bubbly real estate environment. There is a tremendous difference between speculating/timing the market and investing.