[one_muggle]

Lookout,

5.07%ROI in US dollars??? No offense, but that kinda blows. You can get better than that with a CD. Try IndyMac, Etrade, Eloan, ING… And if you are worried about the $100k FDIC limit, you can buy into several, if you’ve more than a few $100k, first good for you, but then you should probably have a firm managing your money.

Also, I don’t know what bad experience you’ve had, but even with my very conservative investing I don’t think I’ve had a year where I’ve lost to the market, at least nothing significant. Granted some years that means I have just lost LESS than the market. But, if I didn’t beat the market on average, I would just buy index funds and spend more time on other business.

-one muggle

[one_muggle]

I’ve seen a significant increase in the number of rental signs and for sale signs, sometimes both 8^), in the LA foothills.

I’ve also seen a few really high asking-rents, one of which recently foreclosed (hehe).

-one muggle

[one_muggle]

I’ve seen a significant increase in the number of rental signs and for sale signs, sometimes both 8^), in the LA foothills.

I’ve also seen a few really high asking-rents, one of which recently foreclosed (hehe).

-one muggle

[one_muggle]

picpoule, merely a suggestion, but you might look for tax free bonds and/or stashing a little bit each month over the next year or three into safe harbor stocks, like KO, JNJ, BUD or UFCS (examples, NOT specific recommendations). These type have global reach, are fairly steady (most days–not today ;^) )and/or generate a decent dividend (taxed at 15).
Even though you are retiring in two yrs, money that you plan to need 10 yrs from now is still typically game for stocks.

IMHO right now is not the time to dump your money into stocks, but with the dollar cratering, you might want to consider slowly dribbling money in during this bear market rather than sitting on it all. It is nearly impossible to time or measure the exact bottom or top. Better to pick good companies or index funds and invest long with dollar cost averaging.
One last suggestion, if you really don’t know what to do with the cash, hire a professional FOR A FLAT FEE, not a percentage, to explain your options. (If you work for a large company, your retirement fund company for 401k/403b or the like will have seminars every few months. They typically steer you to their own products, but mine at least tells you other options.
Finally, websites like clark howard or motley fool have free and fee info sites that are helpful.

Good luck.
-one muggle

ps. Ditto bsrsharma–but that is too complicated and scary for me. I sleep better buying foreign stocks to leverage off the weak dollar.

[one_muggle]

picpoule, merely a suggestion, but you might look for tax free bonds and/or stashing a little bit each month over the next year or three into safe harbor stocks, like KO, JNJ, BUD or UFCS (examples, NOT specific recommendations). These type have global reach, are fairly steady (most days–not today ;^) )and/or generate a decent dividend (taxed at 15).
Even though you are retiring in two yrs, money that you plan to need 10 yrs from now is still typically game for stocks.

IMHO right now is not the time to dump your money into stocks, but with the dollar cratering, you might want to consider slowly dribbling money in during this bear market rather than sitting on it all. It is nearly impossible to time or measure the exact bottom or top. Better to pick good companies or index funds and invest long with dollar cost averaging.
One last suggestion, if you really don’t know what to do with the cash, hire a professional FOR A FLAT FEE, not a percentage, to explain your options. (If you work for a large company, your retirement fund company for 401k/403b or the like will have seminars every few months. They typically steer you to their own products, but mine at least tells you other options.
Finally, websites like clark howard or motley fool have free and fee info sites that are helpful.

Good luck.
-one muggle

ps. Ditto bsrsharma–but that is too complicated and scary for me. I sleep better buying foreign stocks to leverage off the weak dollar.

[one_muggle]

Thanks Allan,

I do agree that things overall likely will get uglier, but the stock market (unlike RE) isn’t historically expensive, so how bad can it get?
Much of the really stupid sh*t that made lots of money (until recently)was done with private equity. I’d heard from someone that knows far more than I that this was actually the reason the market had not been going up (last year). The big money was trading amongst itself with hedge funds and derivative trades.

Do you think the credit crunch, RE and such really will tank the market (by my crude definition, that would be retracing below its point one-year ago (~11k))?

-one muggle

[one_muggle]

Thanks Allan,

I do agree that things overall likely will get uglier, but the stock market (unlike RE) isn’t historically expensive, so how bad can it get?
Much of the really stupid sh*t that made lots of money (until recently)was done with private equity. I’d heard from someone that knows far more than I that this was actually the reason the market had not been going up (last year). The big money was trading amongst itself with hedge funds and derivative trades.

Do you think the credit crunch, RE and such really will tank the market (by my crude definition, that would be retracing below its point one-year ago (~11k))?

-one muggle

[one_muggle]

radelow, I’ve been doing the same slowly for a while. I also do not short since I am smart enough to know I don’t know enough. After this drop today, I am finally up overall for having pulled money out of the market. The big question is, when to start putting it back in?
Do you pick a date (I’ve heard October–don’t know the rationale) or do you pick a random number, like 12500?

The biggest and smartest thing I’ve done is move away from anything that is heavy on financials, homebuilders, and consumer discretion. I have been heavy beer and band-aids since spring (as well as foreign since ’05)

-one muggle

ps. I’m not more risk averse, since I’ve been skittish for some time. Now I just feel less timid and smarter (or less stupid, at least) for being risk averse.

[one_muggle]

radelow, I’ve been doing the same slowly for a while. I also do not short since I am smart enough to know I don’t know enough. After this drop today, I am finally up overall for having pulled money out of the market. The big question is, when to start putting it back in?
Do you pick a date (I’ve heard October–don’t know the rationale) or do you pick a random number, like 12500?

The biggest and smartest thing I’ve done is move away from anything that is heavy on financials, homebuilders, and consumer discretion. I have been heavy beer and band-aids since spring (as well as foreign since ’05)

-one muggle

ps. I’m not more risk averse, since I’ve been skittish for some time. Now I just feel less timid and smarter (or less stupid, at least) for being risk averse.

[one_muggle]

I think it was a great day. Capitalism works, long live capitalism!!!
The market is finally punishing excessive risk taking, it is about time.

BTW: I am too chicken-sh*t to short, so I lost money today (thought not too much since I have been holding much cash lately)but I am still happy to see the market start shaking out this crap.

Who said” The market can stay irrational longer than you can stay solvent”? Genius.

-one muggle

[one_muggle]

I think it was a great day. Capitalism works, long live capitalism!!!
The market is finally punishing excessive risk taking, it is about time.

BTW: I am too chicken-sh*t to short, so I lost money today (thought not too much since I have been holding much cash lately)but I am still happy to see the market start shaking out this crap.

Who said” The market can stay irrational longer than you can stay solvent”? Genius.

-one muggle

[one_muggle]

Regarding wall streeters losing jobs, I don’t feel bad at all and I have family/friends on wall street.
The smart ones have built up a cushion for just such an event. My bro-in-law went from 7 figures to negative post-9/11. He wasn’t happy, but he was easily able to ride out the storm because he had low debt and a diverse cash generating portfolio. They work in the freakin financial markets and if they don’t know how to diversify, let Darwin sort them out.
It’s bad enough I’m forced to pay these guys almost 1 percent every year for the pleasure of having a 403(b), if they can’t figure out how to ride out a financial crisis–let them work at Walmart for a few years.
BTW: same goes for Realtors–my Realtor friend owns his house and car outright, and has about one year’s expenses in the bank. After all, it has been a very good half-decade. If you don’t know how to put some aside, maybe now you’ll learn.

-one muggle

[one_muggle]

Regarding wall streeters losing jobs, I don’t feel bad at all and I have family/friends on wall street.
The smart ones have built up a cushion for just such an event. My bro-in-law went from 7 figures to negative post-9/11. He wasn’t happy, but he was easily able to ride out the storm because he had low debt and a diverse cash generating portfolio. They work in the freakin financial markets and if they don’t know how to diversify, let Darwin sort them out.
It’s bad enough I’m forced to pay these guys almost 1 percent every year for the pleasure of having a 403(b), if they can’t figure out how to ride out a financial crisis–let them work at Walmart for a few years.
BTW: same goes for Realtors–my Realtor friend owns his house and car outright, and has about one year’s expenses in the bank. After all, it has been a very good half-decade. If you don’t know how to put some aside, maybe now you’ll learn.

-one muggle

[one_muggle]

Sadly, I don’t subscribe to the 20 percent by year’s end theory. But, if the market can jump around 10 percent in a month, as it did in some LA foothill towns a few years back, why is a sharp drop impossible?
The run-up was largely due to an abundance of credit and speculation (including fear of being priced-out). The downturn is precipitated by the credit crunch and fear that prices will drop significantly.
I know prices are sticky, but those with a bunch of equity can drop prices hard and fast to pull out, and those without equity might be forced to sell at a loss (short sale or foreclosure).
When you consider $300k homes from 2001 are selling for about $1M, why is a pullback to $800k out of the question?
That is still a very healthy double-digit annual appreciation. (now if I can just convince my neighbors)

-one muggle

[one_muggle]

Sadly, I don’t subscribe to the 20 percent by year’s end theory. But, if the market can jump around 10 percent in a month, as it did in some LA foothill towns a few years back, why is a sharp drop impossible?
The run-up was largely due to an abundance of credit and speculation (including fear of being priced-out). The downturn is precipitated by the credit crunch and fear that prices will drop significantly.
I know prices are sticky, but those with a bunch of equity can drop prices hard and fast to pull out, and those without equity might be forced to sell at a loss (short sale or foreclosure).
When you consider $300k homes from 2001 are selling for about $1M, why is a pullback to $800k out of the question?
That is still a very healthy double-digit annual appreciation. (now if I can just convince my neighbors)

-one muggle

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