Investments

[OceanAnnie]

Is the economy effecting how you invest? Our perspective has changed. Our stocks have taken a big hit. They aren't really promising at this point. We are looking at some different options. Less risk is looking good to me right now.

How about you?

 

[Muushka]

Hi Annie

On Monday, when TRowe Price opened up, I transferred all of my Roth IRAs over to very low risk Prime Reserve Fund. I promised myself when the Dow hit 11,000 I would do it. But I knew my husband was not on board with the decision. Finally I couldn't take it any longer! But I just did that with my funds, not his.

I am glad I did this. It is diversifying in a way, right? In my mind it is a win-win. If the stock market recovers and continues to go up, my husband has a lot more than I do, so at least most of our funds will benefit. And if it tanks (which I believe it will), at least a portion of our funds will be all right.

 

[golfgal]

Other than buying more than normal, no. We still have 40+ years to be earning on our retirement funds (you still earn when you are retired so this would take us into our mid 80's). If you are applying short term strategies to long term money you will always lose out. Define a strategy and stick with it. If you invest on emotion, you will always lose. Also, asset allocation is ALWAYS a good strategy.

 

[OceanAnnie]

Hi Annie

On Monday, when TRowe Price opened up, I transferred all of my Roth IRAs over to very low risk Prime Reserve Fund. I promised myself when the Dow hit 11,000 I would do it. But I knew my husband was not on board with the decision. Finally I couldn't take it any longer! But I just did that with my funds, not his.

I am glad I did this. It is diversifying in a way, right? In my mind it is a win-win. If the stock market recovers and continues to go up, my husband has a lot more than I do, so at least most of our funds will benefit. And if it tanks (which I believe it will), at least a portion of our funds will be all right.

Hi Barb

My DH and I are a lot like you guys. I want to diversify more with lower risk to hedge our bets but we have different ideas. Right now we are kicking around ideas. We don't want to keep losing, that much we agree on. At this point, we'd be happy (and lucky) to just keep what we have. We both came into the marriage with investments of our own and we have made and maintained investments together over the years also.

Some moving here and there I think would be a very good thing.

 

[Dan Murphy]

What are the time horizons before you start to use the investments in question; over what period of time will it be to disburse/use the investments in question, once they have started to be used?

(not to be taken as financial advice)

 

[OceanAnnie]

What are the time horizons before you start to use the investments in question; over what period of time will it be to disburse/use the investments in question, once they have started to be used?

(not to be taken as financial advice)

Hi Dan!

These are long term investments. We won't be thinking about retiring for quite awhile and college for the kids is more than a decade away. Ideally I would like a high yield, but realistically I'm looking for a safe place to park the funds where they will still (somewhat) grow. I just don't want to lose what we have. And that is a real possibility.

Of course I'm saying, "we, we, we", but the reality is I'm the lower risk seeker at this point.

*I'll check back later.

 

[Muushka]

We (you and I) are alike!

We won't need ours for another 20 or so years, if all goes well.

I just remember watching what happened back in 2008.
I know you can't accurately time the stock market, but you sure have a good idea when things start to head north or south.

 

[MerMom60_94]

Hi Barb

My DH and I are a lot like you guys. I want to diversify more with lower risk to hedge our bets but we have different ideas. Right now we are kicking around ideas. We don't want to keep losing, that much we agree on. At this point, we'd be happy (and lucky) to just keep what we have. We both came into the marriage with investments of our own and we have made and maintained investments together over the years also.

Some moving here and there I think would be a very good thing.

Hi Annie!

The way I look at it is this, you don't lose anything unless you sell and it's a down market. You may see your investments equate to a lower value, but you haven't lost anything because it's only on paper, if that makes sense. If I believe in an investment and the market is down then I should be buying more, not selling, based on the fundementals of the investment.

All that being said, I must admit, when the markets are back up I probably need to reassess my allocations. DD is a freshman in high school so I am particularly nervous about her college funds since we are hitting the home stretch. As Golfgal said, retirement funds will be invested for a long time to come because they have to stretch over our presumed life span. My DH is considering retirement at the end of this year and if he does he will have to go out and find another form of employment to bring in income that we can live off of for right now. I am trying to encourage him to hang in there for just a few more years but also realize his reason for wanting to retire is due to some recent health concerns. Either way, I don't want us to start tapping into the well too soon.

 

[OceanAnnie]

Hi Annie!

The way I look at it is this, you don't lose anything unless you sell and it's a down market. You may see your investments equate to a lower value, but you haven't lost anything because it's only on paper, if that makes sense. If I believe in an investment and the market is down then I should be buying more, not selling, based on the fundementals of the investment.

All that being said, I must admit, when the markets are back up I probably need to reassess my allocations. DD is a freshman in high school so I am particularly nervous about her college funds since we are hitting the home stretch. As Golfgal said, retirement funds will be invested for a long time to come because they have to stretch over our presumed life span. My DH is considering retirement at the end of this year and if he does he will have to go out and find another form of employment to bring in income that we can live off of for right now. I am trying to encourage him to hang in there for just a few more years but also realize his reason for wanting to retire is due to some recent health concerns. Either way, I don't want us to start tapping into the well too soon.

Hi Leslie! I know what you stated is true, however I'm looking at the changes in the markets that don't fall within normal cycles. That has me nervous. We are in negotiations.

 

[Freyja]

Really wish we could invest at this point, but we lost all our investments in the Icelandic Bank Collapse in 2008. Once we´re able to put money aside again will be playing a lot more safe than we did before.

 

[Dismagic1]

Is the economy effecting how you invest? Our perspective has changed. Our stocks have taken a big hit. They aren't really promising at this point. We are looking at some different options. Less risk is looking good to me right now.

How about you?

Buy a small amount of stock in your favorite companies right now but leave a lot of cash on the sidelines in case market continues to go down so you can buy more when the Dow hits 9000, 8000, maybe even 7000.

In the meantime, sell covered calls against your long stock to generate a stream of income.

 

[Muushka]

Buy a small amount of stock in your favorite companies right now but leave a lot of cash on the sidelines in case market continues to go down so you can buy more when the Dow hits 9000, 8000, maybe even 7000.

In the meantime, sell covered calls against your long stock to generate a stream of income.

That is great advice and I wish we could have done that last March 2008.
We had the cash, but my husband got laid off and investing in the stock market was the furthest thing from our minds.

Maybe next crash.

Freyja, you lost all of your investments in a bank crash in Iceland? That is terrible. I guess they don't insure banks there?
Well if our government collapsed, I don't imagine the FDIC would be worth much.

Does anyone else feel like we are right behind Greece?

 

[Freyja]

That is great advice and I wish we could have done that last March 2008.
We had the cash, but my husband got laid off and investing in the stock market was the furthest thing from our minds.

Maybe next crash.

Freyja, you lost all of your investments in a bank crash in Iceland? That is terrible. I guess they don't insure banks there?
Well if our government collapsed, I don't imagine the FDIC would be worth much.

Does anyone else feel like we are right behind Greece?

Yes, all our investments were in stock and most of them in the Icelandic banks. In a matter of 7 days it all disappeared. There were "only" 3 big banks in Iceland at that time and they all went bankrupt and were nationalized in a matter of days in October 2008. It turned out the banks were 10 times bigger than Iceland´s GDP.

 

[Muushka]

Oh my gosh. And I complain about this country. That is so sad.

 

[OceanAnnie]

That is great advice and I wish we could have done that last March 2008.
We had the cash, but my husband got laid off and investing in the stock market was the furthest thing from our minds.

Maybe next crash.

Freyja, you lost all of your investments in a bank crash in Iceland? That is terrible. I guess they don't insure banks there?
Well if our government collapsed, I don't imagine the FDIC would be worth much.

Does anyone else feel like we are right behind Greece?

I do.

Yes, all our investments were in stock and most of them in the Icelandic banks. In a matter of 7 days it all disappeared. There were "only" 3 big banks in Iceland at that time and they all went bankrupt and were nationalized in a matter of days in October 2008. It turned out the banks were 10 times bigger than Iceland´s GDP.

I am sorry for what you have been through. How did you manage financially when all of your funds disappeared? Can you share some lessons learned?

I can see it happening here. We are printing, borrowing, and spending money faster than it's legitimately being made. It isn't sustainable. There is chatter of the US losing our AAA rating, which will grossly effect our economic status. I think we are teetering on the brink.

 

[Muushka]

Of course you agree with me Anne. You are my kindred spirit!

I don't know how people don't see this. And they trust the powers that be that they know what they are doing.

 

[OceanAnnie]

Of course you agree with me Anne. You are my kindred spirit!

I don't know how people don't see this. And they trust the powers that be that they know what they are doing.

I don't either. If we lose AAA rating, it will be huge. Huge. We are making the same mistakes as countries that are in economic strife. We are seeing it unfold. That's our future if we don't turn this mess around.

 

[Muushka]

What will the affects of losing the AAA rating? Higher interest rates on loans is the one thing I understood. That when the USA borrows money, it will be much more difficult to pay it back, right? It is times like this that I am so glad I didn't have children. So sad.

 

[Dismagic1]

Losing our AAA status is years, maybe even decades away. It will happen though, that is a near certainty.

And I highly suggest that before it does happen, you have a basket of international currencies (not euros) so when the dollar becomes worthless you are all protected.

If you have a brokerage account at Interactive Brokers, you can convert your US Dollars to various international currencies and then invest with your currencies.

I've started doing this small and will continue to do so over the next decade until I see signs of a President and Congress that actually have a clue what's going on.

 

[SandrA9810]

I'm actually ok with my retirement choices. Considering most is in Disney, I don't think they're going to fall under any time soon. And I've seen them rise over the past year or so to a decent profit from the original amount invested. Of course I've got years and years to worry about this stuff later.