Letters to the Editor

I bought stocks; my husband bought CDs. Now I can't bear to look I can't get up the nerve to tell my husband just how much money we've lost. By Cary Tennis [2008-12-01]

• For better or for worse, but not through a non-diversified portfolio?

  How old are you? You do not say. Which is absolutely maddening given that that, and only that, determines whether the big dip is a problem. The best advice for dealing with 401K losses is simply not to look. The damage is done. There not much to be done now. Just keep plowing money into the account and make sure you are in a variety of index funds so that your progress, at minimum, tracks that of the market as a whole, which always, always goes up over time.

  So, when the stock market rallies and in twelve years your stocks are worth more than your husband's CDs are you going to lord it over him? Lecture him on his bad choices? Please.

  If you plan for this money to support you both, you might try planning together a diversified portfolio that includes several basic types of investment: bond funds, index funds, T-bills, and possibly real estate. Skip the CDs except for money you want to have available to spend in the relatively short term. No long term CDs. And don't buy individual stocks unless you are willing to spend a lot more time studying investments than most people want to. Likewise don't get any managed mutual funds that have lots of fees and seldom beat the market.

  -- WonderLaw
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