BS4 - investments...

[peanut]

Need I say more?! How much have you lost so far? I'm down 31%. Much better than average I hear. I'm sure hoping things look a lot better in a few years!

How are you handling BS4 in this economic climate? We're placing everything in high interest bearing accounts for now.

[mateosbaby]

We have some retirement money from my dh's old job that is losing like crazy. We had $1500 in there January 2008, and by January 2009 we had lost about $500. A 33% loss. His current employer matches whatever he puts in (up to a certain point, which we're under). Good thing, too, because we're losing about half of the match every time I see a statement. I would love to pull that old retirement money out of there and get it into just a plain savings account. At least then I'd know I'm gaining money instead of losing it. But he doesn't want to do anything that will make us pay taxes on it. I told him, even if we pay 50% in taxes, at least we won't make it to $0 by the time 2010 rolls around! Very frustrating to watch your money just disappear into literal thin air.

[Greebo]

If this were BS4 time for me I'd be loving it. Stocks are seriously on sale right now. This is the best time imaginable to buy into stock mutual funds.

Unless you think companies like IBM, McDonalds, KFC, and the like are just gonna vanish overnight.

[Denvergirlie]

I have a rather small 401K, no other investments at this time. As of the end of 2008, I had a loss of 41%.

In reality, all the money I've put in is still there, but I've "lost" my employer contribution as well as past earnings.

I won't really be in BS4 for another 2 years or so as we have to save a downpayment. I do have 6% gross going into this 401K so alredy have tweaked DR's plan, but right now my focus is getting my FFEF filled up to 6-9 months.

With the Dow dropping below 8000 this week, I haven't checked my 401K in some time, but wouldn't be surpirsed if I've now also lost some of my contributions as well.

I try not to stress about it, it is investing and any investment is a risk.

[Greebo]

Listen carefully:

You have not lost anything unless you actually pull money out!!!

You have the same # of *shares* as before the values tanked.

Say you put in $1000 while shares are $10, so you have 100 shares.

Shares drop to $5.00. You still have 1000 shares, worth $500.

You leave those shares alone. Maybe not this year, maybe not next year, but sooner or later, the value on those shares will climb back up. Back to 10 and then beyond.

It took several years after the great crash of 1929, but people who sat tight and/or BOUGHT in those years made money in the long run.

But if you sell those shares now, you lose the $500, and someone else gets the opportunity to ride those shares back to recovery.

[peanut]

But Greebo, as I understand it "they" (the economic forecasters for Canada) are saying it will be ten years before the market goes back to where it was. I have to pull my money out in five to survive early retirement with DH. I'll have lost money for sure when that day comes. I am plenty ticked at my Financial Planner, who knew that money was slated for early retirement years.

[Greebo]

2 years ago, such brilliant economic forecasters predicted that the real estate market would never falter and this rise in value would go on forever.

[frugalbabe]

I'm not on BS4 yet (I wish) but we have lost about 36% take or leave it from our 401K, and yes while Greebo is right we haven't techinically "lost" anything yet because we haven't pulled it out it's still unsettling to see literally every cent we have put in the last two years just gone. I'm hoping people are right and things rebound but with the way the government is wildly throwing money at everything that moves I don't know it doesn't fill me with a whole lot of confidence.

[kite2281]

Our 401Ks are down tons. We have 529s for the kids, and those have taken a huge hit as well. I wish we were on BS4! Like Greebo, we'd be investing like crazy.

For people just about to retire, things are a lot tougher, though. DH's parents and my parents are both in that situation.

[mateosbaby]

I'm not on BS4 yet (I wish) but we have lost about 36% take or leave it from our 401K, and yes while Greebo is right we haven't techinically "lost" anything yet because we haven't pulled it out it's still unsettling to see literally every cent we have put in the last two years just gone. I'm hoping people are right and things rebound but with the way the government is wildly throwing money at everything that moves I don't know it doesn't fill me with a whole lot of confidence.

I completely agree with you! Yes, technically, we still have the same amount of shares. But when you will be at $0 before this economy pulls back up, it makes WAY more sense (in my logic, anyway) to pull that money out so you actually have some left. If you make it to $0, you don't own any shares anymore, correct?

And yes, the way the gov't is being so stupid with money, borrowing here, throwing it at wasteful people there, etc, this recession/depression/whatever you want to call it is going to be here for quite a while. So in that sense, those of us who barely have anything in there to begin with really SHOULD pull out so that we have the money we already had put in. Then, when the markets are just starting to come back again, we can reinvest and continue where we left off, only going up instead of down.

I don't know, maybe I don't understand investing all that well, but I think I know enough to see that I will be at $0 long before the markets go up and that I will at least have $500 when they go up if I pull out rather than $0 if I stay in. Please tell me if I'm wrong, but that's how I understand it.

[Greebo]

I completely agree with you! Yes, technically, we still have the same amount of shares. But when you will be at $0 before this economy pulls back up, it makes WAY more sense (in my logic, anyway) to pull that money out so you actually have some left. If you make it to $0, you don't own any shares anymore, correct?

If we're talking mutual funds here (and not single stocks), that isn't going to happen unless the entire economy collapses first. McDonalds isn't going anywhere. IBM isn't going anywhere. DAP isn't going anywhere. And the managers of the funds, btw, WILL mvoe the money around if any *single* company falters that's a part of their fund group.

Look - it's 2009. Lets say it takes 10 years to recover. You pull out your money now and wait till it recovers, and you've bought high and sold low. BAD idea.

Right now teh market is at about 2002 levels. IF it drops more, it'll only drop at most for maybe a year. (Please, look up the 1929 DOW and S&P historicals if you don't believe me). Then it'll start to climb again.

So in 5 years if you *have* to pull it out, you're going to be at a better value than you are now, no matter what, unless the sky really does fall.

Do you know what the people who were investing in strong funds 10 and 20 years ago, and *stood firm*, are saying right now about the major loss in value we've suffered in the last 8 months? They're saying, "Wow look at all the money we made."

[mateosbaby]

If we're talking mutual funds here (and not single stocks), that isn't going to happen unless the entire economy collapses first. McDonalds isn't going anywhere. IBM isn't going anywhere. DAP isn't going anywhere. And the managers of the funds, btw, WILL mvoe the money around if any *single* company falters that's a part of their fund group.

Look - it's 2009. Lets say it takes 10 years to recover. You pull out your money now and wait till it recovers, and you've bought high and sold low. BAD idea.

Right now teh market is at about 2002 levels. IF it drops more, it'll only drop at most for maybe a year. (Please, look up the 1929 DOW and S&P historicals if you don't believe me). Then it'll start to climb again.

So in 5 years if you *have* to pull it out, you're going to be at a better value than you are now, no matter what, unless the sky really does fall.

Do you know what the people who were investing in strong funds 10 and 20 years ago, and *stood firm*, are saying right now about the major loss in value we've suffered in the last 8 months? They're saying, "Wow look at all the money we made."

My dh has a 403(b) retirement acct through his old company. As of January, it was worth a little over $1000 after losing about $500 through all of '08. I have no idea what Thrivent has it invested in. I would assume mutual, but I really don't know for sure or how to find out short of having the agents come out and attempt to explain it to me (and probably try to sell me more stuff at the same time).

So, from what you're saying, I should just let it drop to $0 and lose that $1000 completely? I'm very confused how that would help me? Even if we roll it over to his current account (which we wanted them to do, but one or both of those companies wasn't willing to do what we told them to do, and neither of us has the time, knowledge, or patience to get after them about it), it would still be losing money and eventually it wouldn't even matter that we did that.

I can't see this recession being short and "over" in the next year or 2. I see it going on for quite a few years, and if our gov't continues in the socialistic paths it's on right now, it will be for good. As you can see, I don't have a lot of faith in our economy right now, nor in our gov't. I also don't think our money is even going to be worth all that much after the gov't is done messing with it, especially when hyperinflation is around the corner. I am praying I am wrong, but I am just trying to look out for my family in the long run.

Not trying to be "doom and gloom" or anything, or start an argument, just stating how I see things. I'm definitely willing to learn, since I know next to nothing about stocks and how it all works. All I see is our hard-earned money going out the door, when I could have it in a savings account with barely any interest and be doing a lot better than I am now.

[peanut]

Oh dear! Well, as a Canadian in a socialist country I have to say, we aren't doing that badly! We don't tend to have recessions any longer than the US...at least, not that I'm aware of! This one we're just coming into. We've had one quarter of negative growth. The US has had four. We tend to follow behind the US in things...mostly because 80% of our trade is with the US.

We do pay higher taxes though, and have a lower value to our dollar. But most countries do next to the US dollar! I guess it's all what you're used to.

[dcompton]

I am in a quandry about this. We do not pay social security in my present job. It is replaced by a retirement account, and we have a choice of several companies to go with. I have mine with TIAA-Cref. I put in a mandated % of salary (8%, I think), the facility puts in what it would pay in social security. Beyond that I can contribute additional money, but it is not matched. I am not looking at retirement instantly, but at 60, it's not far down the road.

Last year I ended up with almost an identical amount in the account as I had at the beginning of the year, and in the meanwhile, I had poured a lot of money, at least for me, into the Incredible Vanishing Money Pot. If I were younger, I would agree with Greebo 100%. But the recovery time is a worrisome thing for me at this point.

I have no idea what the best thing to do is, but for the present I am not putting any additional money into the retirement account, beyond what is mandated to replace social security. I'm throwing it all into savings, trying to build the long term emergency fund up to at least nine months, and ultimately to at least a year. I am my only source of income, and with my age and health should I lose this job it would be very difficult to find another even in better economic times. A bit later I may start putting at least some in, partly because I really, really hate losing that tax break. But right now, savings is the priority over investment.

Ah, for a crystal ball to know how long for the market to recover and how long it will be before I need it.

[Greebo]

My dh has a 403(b) retirement acct through his old company. As of January, it was worth a little over $1000 after losing about $500 through all of '08. I have no idea what Thrivent has it invested in. I would assume mutual, but I really don't know for sure or how to find out short of having the agents come out and attempt to explain it to me (and probably try to sell me more stuff at the same time).

I know from personal experience as the son of a Lutheran Minister: Thrivent is a strong, reputable company. How you find out what you have is simple - read the statements, and read the prospectuses that, by law, they are required to send you at least annually.

So, from what you're saying, I should just let it drop to $0 and lose that $1000 completely? I'm very confused how that would help me?

You're thinking in panic mode. Go back, read my earlier posts *again*. You don't have $1000 in Thrivent, you have shares in Thrivent. Those shares, right now, are worth $1000. Earlier they were worth $1500. The only way - the only way for the value of those shares to drop to $0 is for Thrivent to mismanage your money, and Thrivent is a solid company, and trustworthy. Do. Not. Panic.

And most importantly - you've already said you don't even know what the money is in. If you make a rash decision now, you will be making an emotional decision in ignorance. That is the worst possible time to make a decision.

Get Educated. Get Informed. THEN think about making changes.

Until you understand your whole financial picture, flailing wildly in an unfounded panic over your $1000 dropping to $0 is just going to make things worse.

Not trying to be "doom and gloom" or anything, or start an argument, just stating how I see things. I'm definitely willing to learn, since I know next to nothing about stocks and how it all works. All I see is our hard-earned money going out the door, when I could have it in a savings account with barely any interest and be doing a lot better than I am now.

If you pull your money out now and put it in savings you will take two losses - one in taxes paid, and the other in the fact that you'll be throwing away the shares you have.

You don't buy high and sell low. If you pull the money out now, you will be selling low.

Stop thinking about your investment accounts as money. Start thinking about them as shares. Read your statements, find out what the money is in, then find out about those investments.

Find a recent statement, list the distribution of your assets, and I will help you get started figuring it out.