So this is a graph of when I finally decided I would diversify into the stock market up until today. I opened an account with the local Morgan Stanley and proceeded to take a conservative approach to investing to hopefully squeeze out a point or two more return than my bank account.My broker and I sat down and chose good strong funds that had a consistent track record over the last 5-10. We weighed in the fact that after 2001 there was only 1 type of fund, a winning fund. I understood and still understand that you don't invest anything in the market that you 1)can't afford to lose and 2) don't expect to lose. However, what were the odds of a complete explosion in the market?
So in the few years I have been doing this, every time the market went up, my funds followed suit with small gains. Every time the market went down, my funds had disgusting losses. Now I am faced with 50% losses in a couple funds and at least 25% losses in all of the others based on costs (AFTER cancelling out dividends).
Logic says leave the money in because you've already lost. Logic also says get that money out, because suddenly I am well beyond "expect and afford to lose." My Morgan Stanley guy keeps telling me things are "OK, my funds are good funds, and when it turns I will be in a good position." Oh by the way, here's the biggest rub, I pay Morgan Stanley a lovely fee each year so that they can hold my accounts.
The rules of the game seem to be very different than in the past. However, I only have a limited personal historical perspective. I can only site the S&L period and the Great Depression as reliable models of what to expect. Both have light at the end of the tunnel.
So, should I get out?
Where do I take the pennies that are left?
Gold usually costs 30% to purchase, and will be worth less than wheat should things get cataclysmic.
T-bills and Muni-bonds are stable, but that is historically based on strong governments, which ours isn't right now. The Federal Reserve is blowing my mind, and because of their 'efforts' there is now no reasonable level of predictability in the market. The whole market is built on having a reasonable predictable level of return.
My credit Union pays 3% on IRAs.
I feel like an idiot for trusting in the market. Any ideas or words of wisdom?
Also: The Gun show is coming to Las Vegas this weekend. Does anyone have a good recommendation for an inexpensive yet good quality gun?
7 comments:
Ugh! I have no knowledge in this area or words of wisdom to impart. This stuff makes my head hurt. You would have to figure that it will go back up again one day though right? If you keep it in long enough? Just stop paying attention completely and check it again in 2 years. :)
I agree. You are young enough that you have lots of time on your side. If you were looking to sell and retire or looking to do something completely diffrent with the money (buy guns) then I would say you probably should get out. I recomend Money Magazine, but remember that it written for people usually older but It can help you with tips and trends. My opinion.
As far as guns go; hand gun, shot gun, rifle? I recomend shotguns for home defense. Mossberg 590 or Remington 870 cheap at gun shows or check the sunday paper. Big 5. rifels next Ruger makes the best rifels for cheap. Mini 14 or mini 30 depending on which round. 7.62 round seems better/cheaper but I think clips for the 7.62 are more expensive. M1-30 carbine from springfield or ak-47 if you can find them for cheap(you almost always can, they are almost all used). Handguns I would stick with glock and probably in .40 or .45. $0 is what the cops seem to carry more. I would love to go this weekend but It would be a last minute descision. If you decide to go, give me a call.
Wow, definately take Erik with you when you go shopping.
When we were first married, Chris said to his family at Thanskgiving "Now is the time to buy gold" His dad replies "What you should buy is wheat!" Ever since then all gold has done has gone up and up and up.
And up and up and up, then down a little. In november of 2002 Gold was about $320. Today it was around $750. Maybe next time around.
Well Chris now you've opened a can of worms. If I could type faster you would get the kind of answer you deserve but you will just have to do with the short version.
I agree with Erik. You need to make some basic decisions first.
1: What is your budget? This will give you a starting point.
2: Is this just to stay at home for home defense? Do you want a duel purpose weapon that you could take hunting to? For this Winchester makes a nice Home Defender Combo model that comes with a short barrel for home defense and a longer barrel for hunting all for under $300 or so.
3: who do you plan on using it? Just you or Jess too? You will have to consider her more if you decide on a handgun of some sort. Her smaller hand and more petit frame will handle far less than you will.
4: Do you want a concealed pistol? If so Utah’s permit is accepted in Nevada and is honored in more states than Nevada's is. So I recommend the Utah permit to anyone wanting one. If you are going to carry, how often do you want to carry? Living in the inferno which is Nevada you wear shorts and a T-shirt often. Do you want to be burdened by a weapon on those hot days? If so you need to consider conceal ability. Is it small enough that it won't get noticed and is it large enough to still get the job done?
Over all I do like the Glock due to the fact that they are absolutely reliable. They WILL shoot when you need them. They are not the prettiest of guns but they are simple, reliable and effective. I carry a Glock 30 which is the compact .45ACP and I love it most of the time. When it gets hot I have been switching to your sisters Walther PPK because it is very small. And a little gun is better than no gun! I would recommend that you not by anything smaller than a .380acp+P. But not something so big that you can not use it effectively. Larger more powerful is not always better (Don’t EVER tell Leigh I said that).
In your case with the neighborhood you live in I would not recommend a rifle. The houses are to close and the walls too thin to stop a rifle round before it passes through three or four neighbors houses. There are lots of options but it all comes down to
What can I afford?
What do I want it for?
Who will likely be using it?
How confident am I that I can use it effectively?
We should talk for a bit before you rush out and buy something you will not be completely satisfied with.
50% is better than 0%
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