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Sunday, Nov 8, 2009
It's pretty standard in the world of investing that if you're in it for the long haul, there are going to be ups and downs and that you don't look at your statements every month but just have an idea of what the market is doing. When you get closer to retirement, you put your money into safer investments. Of course, you do want to diversify and not have all your eggs in one basket so to speak. Picking individual companies/stocks can be pretty risky at any time unless you have a crystal ball. Different types of funds are less risky but still subject to the vagaries of the market. My money is being managed by a very conservative firm and I have lost a lot (on paper). It has happened before and it will happen again. You are no dummy. This is happening to everyone and your husband would be foolish to be mad at you. You'll be OK. Hang in there. Just bring it up when you're reading the paper some morning.
When the NYSE starts emulating the "pump and dump" mentality of the OTC, it's time to head for the exit.
Putting money in CDs is, frankly, a terrible long-term investment strategy - by doing it, he's failing in his responsibilities to himself and to you. That being said, over the last year, it's worked for him. That just means he's been lucky, not good. Think of it this way - if he'd put all his retirement dollars into lottery tickets, and happened to win, does that mean he's been a better investor?
Everybody who has put money in the stock market in the last few years is in your boat. There is normally nothing risky about your investment strategy: my husband and my investments are down at least 50%, as are my elderly aunt and uncle, a much more serious situation, as they are retired.
To put your situation in perspective, I have just finished reading the biography of the Duchess of Dorchester (recently made into a movie with Keira Knightly) She constantly had to go to her husband - and others - to get herself out of debt, and this was due to compulsive gambling!- not a sensible investment, such as yours, that went awry. Once she 'fessed up, she felt better, although her husband, quite rightly, was furious.
Cary's advice is spot-on: use the financial adviser as the forum for clearing the air; you will feel great relief, and your husband will probably react with more sympathy than you expect. Good luck!
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You 'or' a prezzy's dentist?
The Treasury Guru Teaser?
Huh? or a sushi chefs wino?
Ya' sip Japanese plum wine?
Friends sip Fu-Ki. Plum loco.
It's not a bad word. Rots gut.
Prezzy's eats wet spaghettini.
Bipolar politico rob pig-bank.
Ay Life? Dedicated`Depravity.
Debauchery. Thievery. O Vile.
Bush worst Lithium president.
Dedicates scribbles to bakers.
Maybe prezzy have mash ears.
Butter do melt. Eat hot potato.
Tantrum? prezzy? Whodunnit?
Thee White House sushi kook?
Cauliflower Sores. Pouting lips.
Ya' wonder if they regret born?
Oy! boy and girls with pamper?
O eat unraveled twisted pretzel.
The soft dough no breaks teeth.
Buy Salted pretzel. Cost $1. 98.
Eat sushi, apple pie, sip Fu-Ki!
Fu-Ki plum wines taste crappy.
Ay, Ya lost money? O bad mind?
Quiet. Shush. Sushi. Such`ness.
prezzy, no be deleting possum?
You have what is called unrealized losses. What this means is if you sell now you will lose the money. If you hold it - well, it has a chance to go back up and even higher.
Considering you said you have 25 years until retirement, you may want to consider staying invested in some of your holdings.
Also, right now is a good time to invest. This may be a hard thing to hear after seeing your total value drop by thousands, but you are buying at a relative discount.
For example, look into an index linked product for long term. Most indexes have dropped significantly in the last couple months (around 30%).
As well, as jittery as you are - keep in mind that keeping your money under a matress is the last thing you want to do. At the very least put it into a holding that will yeild small but stable returns. A GIC or money market fund would suffice.
Use common sense, diversify and there is nothing else one can really do right now.
I wouldn't depend on Financial Advisers.
For starters, you didn't screw up. It sounds like you invested in a much more sensible manner than did your husband, given that you have 25+ years until retirement. Don't feel guilty here; you have done the right thing and, whether you know it or not, you probably still are doing the right thing by staying invested. The returns from a diversified portfolio will, in time, beat your husband's much more conservative allocation. And time is on your side here--you don't need the money for 25 years. I know it is hard to believe, given how painful the current market environment is, but there have been periods like this before. The market will recover sooner or later, and if you sell your investments now you'll miss out on that.
As you approach retiremnt you should rotate into more conservative investments to preserve capital, but with 25 years to go, taking some risk is the way to go. Time is on your side.
Cary is right though; it is worth spending the time (and perhaps a bit of money) to talk with a financial planner to make sure that both of you understand what you are holding. If nothing else it will make you feel better!
Dear LW,
Your husband knows already. Unless he's been the provervial ostrich, head in sand/denial, he knows. So -- assuming he didn't beg you to get out of stocks just before the market crashed, leading to an all-out emotional brawl in which you said insulting things to each other, and you ranted about how dare he tell you how to invest your retirement savings, how dare he presume to think he should override the advice of your professional financial advisor -- there is no reason for you to do anything at all except say:
"Honey, as you know, the markets tanked. Like everyone else's, my investments tanked too. The good news is that we aren't retiring any time soon, so there's time for my portfolio to recover. But right now the markets are so depressed that I can't bring myself to read my monthly statements... which is actually a good thing because if I do I might be tempted to sell, and thereby crystalize my losses. Which I/we cannot afford to do."
And then what you need to do if figure out how much liquid cash you have kicking around, and plow it all into the mind-numbingly-depressed market. That is the conversation you need to have with your spouse: can the two of you as a couple find a way to take advantage of the current, hugely advantageous, buyers' market? If so, what investments do you as a couple want to make? (Avoid sectors that have the strench of outdated 20th-century thinking, like the American auto manufacturers, and you'll probably do okay).
Because the honest-to-goodness truth about the funds in your portfolio is that they won't start to rise in value again until people like you decide that it's time to buy. If you spent last weekend blowing all your cash on new electronic equipment because you felt it was your patriotic duty to stimulate the economy, fine, that might have helped... but if you want the stock market to turn around, put your dollars there.
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Salon headlines in your mailbox
