There are no rules preventing you from taking your money out of the stock market at any time. However, there may be costs, fees or penalties involved, depending on the type of account you have and the fee structure of your financial adviser. You'll also have to consider the opportunity cost of no longer being in the market.
You can buy or sell stock market shares anytime the market is open. Regular trading hours are non-holiday weekdays between 9:30 a.m. and 4 p.m. Eastern time.
Pre- and post-market stock trading sessions are also available, but these markets are thinly traded and best left to professional investors.
To "take money out of the stock market," you'll have to call your broker or enter an online order to physically sell whatever stock investment you have, be it a mutual fund, exchange-traded fund or individual stock.
Retirement Accounts & Annuities
If you own stock in a retirement account or annuity, you're just as free to sell your positions as if you held them in a regular investment account. However, if you want to pull that money out of the account and put it in your pocket, you may face steep costs. These types of accounts charge income tax on any withdrawals. In most cases, you'll also have to pay a 10 percent penalty if you're under the age of 59 1/2.
Fees & Commissions
Although you can get out of the stock market at any time, it might not always be cost-effective to do so. When you sell a stock or an exchange-traded fund, most brokers charge a commission. If you don't have a lot of money invested, those commissions can be very high on a percentage basis. For example, a full-service brokerage might charge you $100 to sell a stock. If you only have $1,000 invested, you'd be paying a 10 percent commission to get out of the stock market.
Some stock mutual funds cost nothing to sell, but others charge fees. In most cases, these so-called "back-end sales charges" decline over time, making it more cost-effective to keep your money in the stock market longer.
Every time you take your money out of the stock market you miss out on any further gains that the market makes, though you also miss out on potential losses as well. If you are a short-term trader, putting money in and taking money out of the market is a regular occurrence. However, to make money as a trader, you've got to know when to take money out and when to reinvest it, which is a hazardous game that even professionals struggle to master. If you're a long-term investor, taking your money out of the market can prevent you from reaching your long-term investment goals, such as saving for retirement or a college education. Your decision to exit the market ultimately depends on your own personal financial situation and goals.