(Calling Shel!)...Who has simple keys for what to do with your money...(!)...

[Regular Guy]

I was reminded of your name by searching on Bogle, and there you were.

But...to anyone with a sharp, flexible, and somewhat conservative mind...

with or without regard to age...

Does anyone have some kind of reasonable common sense approach to their hard earned money right now.

We''re not wealthy...but my wife and I have saved over a number of years...and we''ve seen in what seems like weeks a 25% loss of our wealth...without looking at statements, per se...but by seeing the Dow go from 1200 to below 900...and we''re in the broad market of stock mutual funds.

 

[dragonfly411]

SO and I have made a pact to put at least 10 percent of each paycheck away each week (or biweek if it qualifies).

Coupons and sales are important! They are key to saving money, I know others just don''t always agree, but I''ve saved a great deal through coupons and deals.

Don''t spend your money unless you need to. Before buying something, ask yourself if you absolutely HAVE to purchase or REALLY need it. I''ve been doing this a lot lately, and most of the time, I tell myself no. Daily necessities I''ll get, and even stockpile if I find a good deal on. But do I really need a new shirt? Do I really have to have that pair of earrings (I got them anyways, 6 bucks for hand made earrings isn''t bad). ETC

STOP GOING OUT TO EAT..... STOPPIT

STOP GOING FISHING...... STOPPPPITTTTTTT lolol

We''re finding things to do at home more, like cook out, learn to cook new things together, enjoying the swing outside, I''m riding more, and riding our ATVS

 

[Regular Guy]

Date: 10/10/2008 10:36:53 AM
Author: dragonfly411
SO and I have made a pact to put at least 10 percent of each paycheck away each week (or biweek if it qualifies).

So...although the question I asked goes more to already saved money...and you''re speaking to turning potentially unrealized cash into money...the question remains...where to put the money away...into?

Cash equivalents
Stocks
Bonds
other hybrids

and with what strategies in mind.

And, to repeat...if you already have $1K, $10K, $100K $100,100K...what then?

 

[ljmorgan]

Regular Guy,

I know that it can be hard, hard, hard to see your investment holdings plunge. My own retirement holdings have taken hits of upwards 30% total now this week, and it''s not fun to watch the falling balances. But my advice is to... ignore it! That''s right -- ignore those feelings of panic, because from your post, it looks like you''re in a good spot.

If you''re holding a good mix of mutual funds that are just tracking the market, like index funds, or even if you''re in large growth, large cap, etc -- you''re going to be fine. As you know, the DOW has gone from 14,000 last year to in the 8,000''s this week -- a huge drop. As long as you''re not within 1-5 years of retirement, and you''re holding a mix of funds, my advice is to hang onto the ride. I want to let you know that with the account hit I''ve taken, I know some people who are running. But I have time on my side, so I''m doing what''s smart -- this month, and particularly this week (I even made a stock buy today!) I''m dumping even more money into market tracking funds. Why? Because the market will go back up. And as long as you don''t need that investment money ASAP, it doesn''t matter if the market recovers in a week, a month, or a year.

Here are some of the major factors to consider when deciding what to do with your money:

1) Do you already have some cash set aside? How is your income flow? If you have a nice cash cushion, they''re no reason to go dumping your funds -- you''ll just be selling at the bottom, losing plenty of $$$.

2) Did you put money into investments that you need within the next 5 years? That''s a trickier situation. Ideally, you''re not putting short term money (1-5 years) in any sort of mutual funds or stocks, which in my mind should be reserved for long term growth, and because situations like the current market can happen when you need that money. If you DO need that money, you''ll have to take the hit, and move some of your funds to safer waters (bonds, high yield savings, etc)

3) If you''re wanting to set aside some more cash, I recommend high yield savings (not really high that now, but better than nothing) such as ING Direct, HSC, etc. Also bonds are doing well right now, and CDs are good for slightly longer term money (1-3 years.)

But I would stress -- if you don''t need the money, and you''re in a good mix of funds, hang tight. It sucks to see your net worth drop (my accounts look like a massacre!) but you''ll be fine. The people who are hurting the most right now are the folks pulling all of their money out of their investments, just because. There are reasons to do it, but being scared isn''t one of them. It''s a very, very costly mistake.

 

[dragonfly411]

aaaa I missed that part sorry!


I''m younger, and haven''t started any major investing yet just due to lower income and lack of savings. Right now I"m putting all of my savings into a savings account that is easily accessible so that if I decide to remove my money I can. I do plan on taking a bit each week out and stashing it under the bed too

Otherwise, I''ll be turning to investment and personal finance books to learn what is best to do with my money

 

[fieryred33143]

I had a financial advisor as my professor for an advance finance course.

He said that the #1 best investment to make is a 401K. The second IRA. He felt that people never win on the stock market. If it were me, I''d stick it all in there.

And having worked in hundreds of fraud cases involving mutual funds and what not, I can tell you that I never advise people to go down that route. They''re all corrupt. But that''s just me and I know little of investing

 

[purrfectpear]

You missed the window to cash out of mutual funds and stocks. Sit tight.

The next time you see things starting to go south, don't wait. Move it into something guaranteed and liquid for a few months. Now is a decent time to buy, but I sure wouldn't be selling.

It's fine to say "401K", but the majority of people using those have them in mutual funds.

The important thing to remember is this is YOUR money. A 401K is not "set it and forget it". Watch the market. Move it out of mutual funds and into a guaranteed fund (which most funds offer) BEFORE a nose dive. I moved mine in Feb. guaranteed 5%. I'm not happy with the rate, but it sure as heck beats a kick in the head.

Last two years I was making between 15% and 17% in my 401K in international funds, glad I moved it.

 

[partgypsy]

(Disclaimer - not an expert by any means, just personal perceptions)
Well I always kind of laughed at the people buying gold but it is surreal to see how much and how fast the market has dropped. I am with you, wondering if I am doing the right thing, just sitting tight. But the damage has been done and I am a long long way from retiring (20-30 years). They say that down times are a more accurate time to assess your risk aversiveness. You may feel right now that the mix you have is too risky. I''m no fortune teller and for all we know the stock market may continue to go down, or be really down for a very extended period of time. But if/when the market stabilizes, may want to reassess your risk balance and make your money more safe/liquid by keeping a larger cash balance in cds, high interest savings accounts, I''m sure there other things out there as well, and rebalance your investment savings such as putting a higher percentage of investment savings in G bonds which hover above inflation (that is, they don''t make much money but at least preserve your capital).
One thing I''m wondering if it is worth it is I put all my retirement money in a 401 (lifetime fund). People argue not to split up your retirement money if it is in a lifetime fund because it will become unbalanced. But part of me kind of wishes I started a Roth, for either me or my husband, because after 5 years money can be taken out without penalty. That would feel nice in situations like this, where feel like taking money out of the stock market. In contrast, taking money out of the 401 money is too aversive because the penalties and taxes.

The other thing I think about is diversification. Not just with stocks, but with all your resources. Do you have too much money tied up in your house? Most people won''t or are unable to sell their house when money is tight (such as right now). Think about your job, if there is a way to make it more secure. It sounds like your live way below your means which is great and to me the best way to "recession-proof) your life.

 

[hibiscus]

Date: 10/10/2008 9:33:45 AM
Author:Regular Guy
I was reminded of your name by searching on Bogle, and there you were.

But...to anyone with a sharp, flexible, and somewhat conservative mind...

with or without regard to age...

Does anyone have some kind of reasonable common sense approach to their hard earned money right now.

We're not wealthy...but my wife and I have saved over a number of years...and we've seen in what seems like weeks a 25% loss of our wealth...without looking at statements, per se...but by seeing the Dow go from 1200 to below 900...and we're in the broad market of stock mutual funds.

So...although the question I asked goes more to already saved money...and you're speaking to turning potentially unrealized cash into money...the question remains...where to put the money away...into?

Cash equivalents
Stocks
Bonds
other hybrids

and with what strategies in mind.

And, to repeat...if you already have $1K, $10K, $100K $100,100K...what then?
Ira Z.


Regular Guy,

I used to be an investment manager (for 5 years until a bigger better job at the tv station swept me) and here's my two cents for an everyday Joe. First and foremost, the portfolio differs for every age group and the amount of money the individual have to invest taking into consideration his/her income and debt. 25% of one's income should be set aside for mortgage. 10-15% should be cash set aside for saving and investment. So, let say you make 8k, 2k goes to making monthly house payment and that 10-15% to set aside is about $800-$1200. So now, you still have between $5200-$5600 for insurance, car, grocery, credit card payments etc.

As for the portfolio, the older you get, you have to be more conservative in your investment. Mutual funds and stocks, the former holding a lesser risk but still a risk. As you get older, you need to invest more in guranteed funds and CDs. That should be 70% of your investment plan, as you don't want to take a huge risk playing around with money that need to be reserve for later part of your life.

Next, everyone needs an OBJECTIVE and be realistic about it. Don't expect to make 50%.. When you invest in mutual funds, it is meant to sit for a longer period but we all don't stick to that. We love making money, seeing our fund goes up. Conservatively, if you invest in mutual funds, have an objective of making between 10-15% within the next 3 years. And, diversify your portfolio. Don't just go for mutual funds, you need hard cash in saving account, guranteed funds and mutual funds. Most of us would continue to watch the market hoping it will go higher (you can do that but do set a limit, depending on the market but would you take the risk, after you make 15%? What if the fund drop so much you hardly even make 2%? Better take that 15%.. and find something else to invest in.

I've made some investment in 2000 in mutual funds, and fund prices are low and I saw potential in plenty of funds.. I still have them and despite the market going south a few times, I'm still not affected as I already made more than 100%. The longer you keep it, the more you can expect to make. Diversify into different mutual funds. So now, let say if you have 20k cash and not sure what to do.. You can go for the 80% mutual funds/20% CD or 50% mutual funds/50% CD or 20% mutual funds/80% CD.

I hope this gives you some light, this is my personal opinion but if best to seek advise from a financial adviser.

 

[Dancing Fire]

you wanna make easy money? just sell short on the stocks i buy !!

 

[Hudson_Hawk]

I heard an interesting plan today on a money show on the radio.

In the event that your employer stops matching your 401K contribution (which I''ve heard has actually started happening?), take the money you invest there and sock it away in a savings account (like ING) until you can amass 3-6 months worth of expenses. This, while not giving you the ''best'' interest rates, will give you somewhere to put your money and will give you a safety net in the event that you''re laid off or you have a major expense that you need cash for. I guess the point is that a lot of people are going to need liquid savings more than invested savings in the coming months/years, and if your company isn''t matching and the market is crap, what''s the point in dumping money into your 401K?

 

[Miranda]

Date: 10/11/2008 6:25:30 PM
Author: Hudson_Hawk
I heard an interesting plan today on a money show on the radio.

In the event that your employer stops matching your 401K contribution (which I''ve heard has actually started happening?), take the money you invest there and sock it away in a savings account (like ING) until you can amass 3-6 months worth of expenses. This, while not giving you the ''best'' interest rates, will give you somewhere to put your money and will give you a safety net in the event that you''re laid off or you have a major expense that you need cash for. I guess the point is that a lot of people are going to need liquid savings more than invested savings in the coming months/years, and if your company isn''t matching and the market is crap, what''s the point in dumping money into your 401K?

Even if your employer is not matching your contribution there is still a benefit. You contribute to your 401k with pre tax dollars. Your taxable income is reduced. Of course if you need the money now you have to pay taxes and penalties. Ideally you should have both long term investments and short term...In addition to a regular savings account.

 

[Regular Guy]

Thanks everyone for your thoughts...

Let me explore one idea that needs to be vetted...by me anyway.

For anyone knowledgeable...(or for those who would like to be, and will have studied enough about these utilities to know as much or more than me)...

Please talk to me about ETFs

Also known as Spiders.

Whereby...it would seem:

A) In principle, you could maintain your investment in even the "total stock market (both big cap & small cap stocks)...but do it...not in a mutual fund...but in a vehicle that is a stock itself...making the contents of the mutual fund and/or the "inclusive stock" identical...except for two differences.

1) There could be very minor selling expenses ($20 per 1000 shares or such...trivial if this gives you effective protection).
2) Possible protection...if the decision to re-engage is understood enough so that smart instruction are supplied. The protection is available because you can place a stop/loss order (not possible with a mutual fund) at whatever marker you choose, and can exit the investment vehicle whenever it reaches whatever dollar or % point you designate.

B) Consistent with (A), it seems to make the use of this work...just a smart set of instructions are necessary. At least...I would like any help this. Regardless...

C) 20 years from now...it would seem that, considering the availability of this sort of option...as I potentially look at the value of my savings going from X to zero...I might be saying to myself...had I only used this vehicle...the total loss of those savings could have been prevented. Is there any major problem with this logic...with the right instruction set in (B)?

Regards,

 

[Harriet]

The other half agree with your reasoning.

 

[Regular Guy]

Date: 10/12/2008 12:13:05 AM
Author: Harriet
The other half agree with your reasoning.

1) Does "other half" equal spouse?

2) Does other half have more to add, vis-a-vis practical strategies...i.e., how to fix downside, and when to get back in (i.e., next day...or based only on gut?)

3) I''ve read further about "trailing stops," which seems a helpful enhancement of a "stop loss" order. Yes?

4) Although I read some variety of opinion through just google searches...I would think the data about these strategies would make them either a) more well known because they''re good...leaving one to question if they''re good at all...since they''re not known widely, and b) despite varied sentiment...one would think a disciplined strategy of applying these strategies could yield a more uniform understanding of the net benefit of payoffs, making the value of their use more black and white..so why isn''t it more black & white?

Thanks everybody...hope this isn''t too obscure...

 

[Harriet]

Date: 10/12/2008 12:51:22 AM
Author: Regular Guy

1) Does ''other half'' equal spouse?

2) Does other half have more to add, vis-a-vis practical strategies...i.e., how to fix downside, and when to get back in (i.e., next day...or based only on gut?)

3) I''ve read further about ''trailing stops,'' which seems a helpful enhancement of a ''stop loss'' order. Yes?

4) Although I read some variety of opinion through just google searches...I would think the data about these strategies would make them either a) more well known because they''re good...leaving one to question if they''re good at all...since they''re not known widely, and b) despite varied sentiment...one would think a disciplined strategy of applying these strategies could yield a more uniform understanding of the net benefit of payoffs, making the value of their use more black and white..so why isn''t it more black & white?

Thanks everybody...hope this isn''t too obscure...

1. No, the other half is my evil twin. Seriously, the other half is my new hubby.

2. Yes, I''ll have him reply tomorrow.

 

[Harriet]

Date: 10/12/2008 12:51:22 AM
Author: Regular Guy

1) Does ''other half'' equal spouse?

2) Does other half have more to add, vis-a-vis practical strategies...i.e., how to fix downside, and when to get back in (i.e., next day...or based only on gut?)

3) I''ve read further about ''trailing stops,'' which seems a helpful enhancement of a ''stop loss'' order. Yes?

4) Although I read some variety of opinion through just google searches...I would think the data about these strategies would make them either a) more well known because they''re good...leaving one to question if they''re good at all...since they''re not known widely, and b) despite varied sentiment...one would think a disciplined strategy of applying these strategies could yield a more uniform understanding of the net benefit of payoffs, making the value of their use more black and white..so why isn''t it more black & white?

Thanks everybody...hope this isn''t too obscure...

2. Sorry. He thinks there are too many variables personal to you for him to weigh in.

3. If you''re a long term investor, there''s no reason to use stops.