The Survival Podcast Forum

Finance and Economics => The Money Board => Economic News, the Global Economy and all Things Monetary => Topic started by: surfivor on February 04, 2009, 09:19:44 PM

Title: Show 134 - Act now to protect money and future ..
Post by: surfivor on February 04, 2009, 09:19:44 PM

 I just listened to that show, anyway. Back around August I went in to Fidelity, I even brought my mother for advice. I basically told the guy there I was a bit scared and wanted to move all or a large chunk of my IRA money into FDIC CD's. I even started talking conspiracy stuff with him .. but anyway, he managed to talk me out of it in favor of a managed account. Since then I have lost about 40,000 dollars, maybe almost 1/3 of the IRA account. I don't need that money right away, but I'd still hate to see it all dissapear ..

 I had thought I would wait until it went back up and then move some of it into the CD's, which was also what Jack had advocated, but it never went up. Is anyone else in that kind of situation ?

 What I also am wondering on the 800 billion stimulus is how much of that money goes into wall street before it gets into the general economy ? If the govt gives the money to the fed or a bank and then tells them to distribute it or loan it out, I would be skeptical as to how much of it we'll actually see ...

Title: Re: Show 134 - Act now to protect money and future ..
Post by: BerserkerPrime on February 06, 2009, 02:08:16 PM
Brother, I'm there with you!  I'm looking at -20K or so.  When I ask for advise, everyone says that it will go back up, but I keep losing.  At what point do I take the lose and put it into CDs?  Soon I think.  I have one more call to make to a very old friend, then make my decision.

 :-\ :-\

Title: Re: Show 134 - Act now to protect money and future ..
Post by: ModernSurvival on February 06, 2009, 09:25:23 PM

You are sitting on the bottom of the market.  It won't go much lower your play now is will it recover in 1 year, 3 years, 6?  My view is if you are talking IRA or 401K and you already took the hit you might as well ride it out. 

I practically BEGGED people to get out in July, August and September!  The reality is that was an EASY call and the jackasses in the "Financial Adviser" business lied to people back then.  The reality is they don't know shit!  They are paid to keep you in the market.

Now I just don't know what to tell you, I can only say I have not bought back in yet.  You have to make your own choice now.  I don't think the risk of loss is very much any longer, the only question is how long do we stay on the bottom and I don't pretend to have the answer to that, I honestly don't know.  My money is in bonds (that I bought when interest rates were better) and CDs (that I bought when interest rates were better) and Gold right now.

I was just asked what indication I was waiting for to "get back in the market", my answer was, I will know it when I see it.  Remember I am not a financial adviser.  I can only tell you what I am doing, why I feel that way, etc.  In the end you must make your own choice.  I do know if you punched that Fidelity guy in the face and got put on trial in front of me, I would never convict you of anything and might advise you to take a second swing  ;)
Title: Re: Show 134 - Act now to protect money and future ..
Post by: Stein on February 09, 2009, 01:35:38 PM
It is a tough decision for sure.  The only thing I will suggest is that you forget what you lost.  Make the decision based upon today and the future.  You can't go back and undo anything.

Personally, I put some money into index funds every paycheck.  Partly because I get a match at work, partly because it is tax deferred, and partly because a CD paying 2% is a guaranteed loss due to inflation and taxes so at least I have a fighting chance to win.  This is money I don't need for 20-30 years though.  I have 6 months of living expenses in guaranteed cash investments (FDIC savings accounts and cash).  A year probably wouldn't be a bad idea.

Nobody knows what the money wasting program will yield, but we do know it won't deliver as promised. 

The key thing is to not make a decision during an emotional state and don't act irrationally based upon what you read or watch.  Be able to clearly and rationally explain any move based upon long-term expectations.  Another key is true diversification - not what the Fidelity guy will tell you (and I like Fidelity).  Real estate, stocks, bonds, metals, guaranteed annuities are all fair game.

On a final note, be careful with bonds.  If you go there, you probably want to buy actual bonds instead of bond funds - and be able to hold them to maturity.  Find insured bonds of the timeframe you are looking for.  Bond funds can be hammered just like stock funds.  If you own the actual bond, as long as they don't go bankrupt on you, you can always hold until maturity.  Many municipal bonds are backed by tax revenue or guaranteed through some sort of collateral - and are paying a pretty good return. 

Many are the investors who have seen their bond fund tank 20-30% (or more) and thought it was "safe."
Title: Re: Show 134 - Act now to protect money and future ..
Post by: BerserkerPrime on February 09, 2009, 05:34:43 PM
Modern Survival,

I remember you saying that on more than one show.   Chock it up to not wanting to beleive that this could happen, and listening to "money experts" to cost a few more thousand.  As painful as it is, I will act know and call it lesson learned!