Feel like the S is HTF in slow motion... - Mothering Forums

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Old 09-26-2008, 09:08 AM - Thread Starter
 
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I have to admit that I watch the news every day. I'm an investor. I have to.

But as I watch what is going on today, I wonder if I just might not be watching the SHTF in slow motion over this past week and this coming week. I wonder if we're watching history in the making.

I can't believe WaMu failed.

No bailout agreement. Not even close.

I am so thankful I started my "one year pantry" a few years ago...

but... (ready for this one)... I regret that we didn't use some of our investments to pay off the house before our investments started dying...

and... I wish I had put more of our money in cash (not literally cash, but liquid assets)...

and... while we will ride the storm out, I am worried and hope that I don't look back with regret.
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Old 09-26-2008, 09:49 AM
 
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I told my husband the other night that it feels like that moment when you can see that the vase is going to fall off the coffee table, but that you can't do anything to stop it - but instead of lasting a split second, it's lasting weeks (months? years? who knows.)

What's weird is we were prepared for this possibility, unlike those who stood their ground that the S would never HTF. But even still, now that it's happening, I'm like, "Wow. It's really real."

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Old 09-26-2008, 09:53 AM
 
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I totally agree about what the news feels like lately. We've tried to be prudent with our money, but I'm starting to feel like even that may not be enough. We have most of our money as cash savings earmarked for an EF and house downpayment money (we had wanted to put 20% down on a mortgage - imagine that!), and a good chunk in retirement investments. Our bank is FDIC insured, but holy cow - now I'm starting to worry about the FDIC!! If JP Morgan chase had not taken on the majority of WaMu's liabilities, the FDIC would have just had to pay out a ton on insured deposits. The FDIC's funds are not infinite. If banks keep failing, I'm worried that the FDIC will run out of funds before my bank fails, if it does. At that point, not only are our investments worth nada, but we may lose our life savings.

Normally I'm pretty rational and calm, but I'm starting to freak out that SHTF is here and that what we've done to prepare may not be enough.
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Old 09-26-2008, 09:56 AM
 
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What's weird is we were prepared for this possibility, unlike those who stood their ground that the S would never HTF. But even still, now that it's happening, I'm like, "Wow. It's really real."
I've always said that SHTF is one of those things that I want to be prepared for, but never be right about happening. I never wanted to have to say "told ya so." I would have love to have been super prepared and looked like an idiot for the rest of my life that to actually see SHTF.
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Old 09-26-2008, 10:33 AM - Thread Starter
 
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I've always said that SHTF is one of those things that I want to be prepared for, but never be right about happening. I never wanted to have to say "told ya so." I would have love to have been super prepared and looked like an idiot for the rest of my life that to actually see SHTF.
I agree.

In a way, I want to just sit here all day and watch what is going on. Instead, on this day off from school, I'm taking dd to the zoo. It will do me some good to have fun today. I don't even want to think about how much our investments are down.
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Old 09-26-2008, 10:38 AM
 
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I have to admit that I watch the news every day. I'm an investor. I have to.

But as I watch what is going on today, I wonder if I just might not be watching the SHTF is slow motion over this past week and this coming week. I wonder if we're watching history in the making.

I can't believe WaMu failed.

No bailout agreement. Not even close.

I am so thankful I started may "one year pantry" a few years ago...

but... (ready for this one)... I regret that we didn't use some of our investments to pay of the house before our investments started dying...

and... I wish I had put more of our money in cash (not literally cash, but liquid assets)...

and... while we will ride the storm out, I am worried and hope that I don't look back with regret.
But if you're a good investor, you know it's not the time to pull out. And you know that there are these peaks and valleys. You don't *have to* watch the news if it's truly going to cause a mental health crisis for you...can you step back for a while and take a deep breath?

4 kids under 10
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Old 09-26-2008, 11:15 AM
 
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No joke, huh? It's crazy!

Minutes ago I was reading cnn.com and my husband and I were commenting how thankful we are to have gotten out of the DC area at the height of the housing mkt. and paid cash for our current house. So many of his buddies have NO work (construction), and that would've been us, too, most likely. With a mortgage to pay, and the huge health insurance bill we were paying. Gah. It gives me chills to think about it.

I'm REALLY, REALLY grateful to have this board and the support and information here. I feel much less freaked out and more prepared to deal with the current events after hanging out here for a while now.
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Old 09-26-2008, 11:20 AM
 
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I feel the same way and wish I had started being more financially responsible years ago. We're still working on getting out of debt so I hope the S continues to HTF very slowly. It is scary, it seems like every day something even worse happens. I hope we all end up ok.

Zen doula-mama to my spirited DS1 (2/03), my CHD (TAPVR) warrior DS2 (6/07) & a gentle baby girl (8/09)
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Old 09-26-2008, 11:29 AM
 
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It really does make me glad that we have put off moving to a bigger house. We have a mortgage we can afford and will be paying off two largish bills in a couple of months. Now mmore than ever it is important to stay on top of the bills and to watch everything.
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Old 09-26-2008, 12:12 PM
 
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I love this board, too. I've been lurking for years and only just joined. :

Very scary stuff out there. I've been keeping an eye out on my bank, Chase, but I think it's one of the strong ones currently. I've got to be even more diligent with my finances, though. I've made alot of mistakes until a couple years ago. Hubby and I are doing okay but we are in an industry to where we might have to watch our jobs if the economy further tanks. It's time to buckle up and hunker down. I worry about my daughter and her husband. Thankfully, they have a regular mortgage and not one of those subprime or ARM's. They are expecting their second child and she's a sahm. I want to be prepared to help them out, too, if need be in the coming months and years.
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Old 09-26-2008, 12:25 PM
 
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It's so crazy. Definitely history-making. And so frustrating. We saw it coming for so many years. I'm sorry, but when a doofus like me can spot the problems from such range, why can't the "experts"? People wouldn't listen to me, either. "No, that's not gonna happen. They won't let it! If that was going to happen, they'd know in time to stop it!"

For the last several years I've kept our savings split among two banks and a credit union. I like knowing that if one place starts having problems or there are delays accessing my funds, we can still survive for several months.

Just talked to a friend who admitted they got sucked into a teaser mortgage two years ago and might lose their house. "I'm one of the people who caused all this," she said. It was heartbreaking to talk to her.
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Old 09-26-2008, 12:48 PM
 
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I keep thinking but I thought I'd have more time! I'm so afraid that the changes we've made in the past couple of years have made us more vulnerable. We moved to the country, thinking we could be more self-sustainable. Sure, I have a ton of food in the pantry and the big garden and chickens. But we have a bigger mortgage, we're farther away from our families, and we're much more dependent on oil/gas than we were in the past.

So what are people doing differently now that it looks like the slow descent has begun in earnest? I'm stepping up my plans to acquire a few items that I'd been putting off. To explain my bias, I am most concerned about inflation/hyperinflation, so I'm interested in finding items that may become unaffordable later on:
1. I'll continue to stock the pantry when possible
2. I'm going to be a bit more vigilant about looking at thrift stores and garage sale for clothes for my kids to grow into, especially my oldest child.
3. I'm considering buying a new water filter and solar oven, for JIC. I'd LOVE to buy a manual pump for our well so we wouldn't be dependent on the electric grid for water, but it's not in our budget right now.
4. I'm trying to stock my library with books about gardening, foraging, animal husbandry and other self-sufficiency topics. The internet may not always been convenient for us to use.
5. Increase the amount of cash we keep at home. I used to be good about keeping a small stash of cash hidden, but it's slowly been whittled away. I often times don't have ANY cash other than a few coins, that needs to change.
6. I feel embarrassed about admitting this, especially on the wise velochic's thread, but we've also cut down on 401K contributions (dropped it to employer match level) so that we can pay off some consumer debt. I know that this goes against the typical 'buy low, sell high' investment advice, but right now paying off debt feels more important than investing.

I'm not freaking out, but I am reading a lot about what's happening and trying to take reasonable steps.

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Old 09-26-2008, 01:02 PM
 
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Annethcz, I understand about the 401k. Two years ago I cashed mine in to pay off huge credit card debt. I weighed the pros and cons for months and agonized over it but finally decided that I didn't want to be paying on so much debt for years to come. What I was paying in interest alone was nearly trumping any gains I was making in my investments, at least it seemed that way. What a HUGE relief to be rid of my debt! I can honestly say that I don't regret having done it and I would do it again. Except this time around it's no more credit cards for me so there won't be another time.
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Old 09-26-2008, 01:25 PM
 
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I just watch at night (right before bed, not the best idea) b/c we have too much going on durring the day taking care of the kids. We are so lucky! We have saved a large chunk of money to build our dream home and we should be moving in next weekend (YAY!) and I am SOOOOO glad we saved so much money for it! Even our accountant was telling us to just invest all that $$ into the stock market and take out a loan for the house b/c interst was historically low. I think we are set to weather a storm, I know that durring out 8 years of marriage we have always tried to save as much as possible for "hard times" and I guess those hard times are coming. I honestly wish I had more time to stock the patnry, though, b/c that is something I"ve put off due to building the house and not wanting to move all that food, ect. I also didn't do much besides tomatoes in the garden this year (and strawberries!), so that's definately changing come spring. Just a tip, we have put all of our cash$$ into our local banks. We feel this is more safe b/c our local housing market is still really stable (midwest) and the small locally owned banks don't seem to take on as risky loans. As for our investments, I am not even going to look. We have made contributions into an IRA, mutual funds for hte last few years and it's just starting to add up. I refuse to see how much $$ we've lost, but I'm not sure if we are investing the whole amount this year, I'll have to see where all the $$ stands at the end of the year. Our accountant actually told us to consider stocks "on sale" right now, and while I guess that's right, it just seems wrong to invest money when you may need that money NOW.
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Old 09-26-2008, 01:28 PM
 
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I think it's hitting the fan.

We moved a bunch of our assets into more liquid format slowly over the past six months, and I feel very grateful we did that. We've left money in the market because we're in for the long haul, but I am glad to have liquid assets available now. Now so long as the banks don't fail and seize them (but I think our bank is stable).

What we don't have (because of lack of storage) is a big pantry. But we did just stock up our emergency food supply which is good enough for about two months. I'd like to get it longer, but our house is very small.

It's happening. It's really happening, what I've thought has been coming for years, and I think my DS is going to grow up with a mentality a lot like my grandparents, who grew up in the Great Depression.
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Old 09-26-2008, 02:20 PM
 
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As I've said before, the current problem has been a long time in the making. It is likely that many more people will loose their savings, retirement funds, jobs, and homes before all is said and done. But I do have a couple questions for you financially savvy mamas.

First, why is everyone always talking about stockpiling food? Is it because you worry that you or your DP will loose your jobs and not be able to feed your family, or is it for some other reason?

Second, as a home owner, who just bought a house last year and has very little equity in the home at present, what would happen if the bank that holds the loan goes under? I'm just wondering how something like this would play out.

Also, DH and I have a modest savings in a credit union. What's going on with them? Are they safer than banks at the moment? Don't they have a different set of laws and restrictions? I've called the CU several times to confirm that our and DS' money is insured - they assure me that it is. Could CU's also be in trouble though? I'm pretty uninformed in this area...
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Old 09-26-2008, 02:33 PM
 
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Well I think things have been in decline for about a year now and MSM and the general public are just clueing in because of the acceleration of the decline in the past week or so.

I think there is a big difference between heading into an extended decline and TEOTWAEKI (The End of the World As We Know It) touted by Peak Oil and other doomsday folks. I see this as a modern version of the Depression or Recession, not Mad Max: Beyond Thunderdome. I'm bracing for a 10 year stint.

So I stockpile to take advantage of sales and squeeze every penny out of our grocery budget...not to have food in case the grocery stores are shut down by looters.

Our home mortgage is fixed rate and we have no CC debt. As long as you are in a fixed rate mortage and are paying on it, if your bank goes under, it will just be sold to another as an ASSET.

Credit Unions are mostly covered by their own version of the FDIC (the name escapes me right now). It is wise to double check with your credit union. We belong to a credit union/bank hybrid that is non-profit. I feel very confident about the security of our deposits.

As for investments, we are in it for the long haul. We are carefully watching to make sure we readjust our portfolio distributions to make the most of buying low when possible and stabilizing our long-term strategy. If you don't have a balanced portfolio then you're going to take more of a hit than you need to.

I am reinvigorated to keep doing all the frugal/simple living things that we've already started doing: growing veggies, reducing energy use, hanging clothes out, cooking from scratch, buying used/not buying at all, etc.
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Old 09-26-2008, 02:45 PM
 
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I totally agree with PP about thinking I'd have more time.

We were planning to "escape" this summer to move back to our home town, which is closer to family and has a real sense of community, neighbors helping neighbors, etc. Now I am worried that we might run out of time. DH says he thinks we'll make it, but I worry.

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Old 09-26-2008, 03:01 PM
 
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I think many people keep a pantry in case there is a natural disaster in their area or in case of economic hardship. If you or your significant other lose their job, wouldn't it be nice to know that at least you will have food to eat for awhile and can concentrate on what to do next?
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Old 09-26-2008, 03:10 PM
 
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just my 2c. Today It hit me with Wamu... i dont know why, but it seems 3 biggies went down this week AIG, Merrill and Wamu, thats ALOT for one week. It just hits really close to home when DH works in finance and i used to work in finance as well.

To the PP who asked about stockpiling and pantry building, the reason our family does it is to get the most for our dollar. I am constantly price watching and couponing like a crazy woman. Now more than ever I feel i must be viligant about our grocery dollars. I do grocery game and try to get rock bottom prices and many items for free or next to free. I also want to have a stocked pantry incase DH looses his job, I dont want to have the added stress of worrying about feeding my kids. Grains, pasta, canned and jarred items keep for anywhere from 1-2 years shelf life, we just make sure we are continually rotating our stock.

What i do need to keep an eye out for is some 'winter' clothes for the kids, we live in az and its still summer here and will be for the next couple months. So hopefully cold weather clothes will be on clearance by the time we need them. All the kids just got new socks/undies with back to school clearance sales. And we are stocked up on art supplies and school supplies, again with the clearance sales that just eneded about 1 month after school started here.

I am watching sales and coupons for christmas presents (yes the holiday will be here soon enough) and while we are comfortable and have savings, retirement, no mtg etc, DH and I have re-worked the household budget INCLUDING holidays. This year isnt going to be as grandious as years gone by, but it will involve more family time, cooking and crafts etc. Which is fine with me, we dont need more toys.
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Old 09-26-2008, 03:30 PM - Thread Starter
 
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But if you're a good investor, you know it's not the time to pull out. And you know that there are these peaks and valleys. You don't *have to* watch the news if it's truly going to cause a mental health crisis for you...can you step back for a while and take a deep breath?
I am a good investor. I have over 20 years under my belt and I've seen the peaks and valleys. This valley is different. This goes beyond my investments tanking.
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Old 09-26-2008, 03:33 PM
 
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I think many people keep a pantry in case there is a natural disaster in their area or in case of economic hardship. If you or your significant other lose their job, wouldn't it be nice to know that at least you will have food to eat for awhile and can concentrate on what to do next?
I live in the Great Lakes area, we don't have natural disasters...Just unnatural ones.

I was just trying to get an idea of what was driving people to stockpile. I grew up with an extended family situation and was around my grandparent a lot. Consequently, I am very familiar with the stockpile and hoard mentality of pp who went through the Great Depression. We had a HUGE pantry, root cellar full of canned goods and dried food, and three gigantic chest freezers full of food. But we also lived in the middle of no where and had spotty electricity, so we were always prepared for anything. Since I married to DH and have lived in the city, with little storage space, I've gotten out of the habit of stockpiling food...I guess I have to re-learn it now that I have a house and have the space for it.
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Old 09-26-2008, 03:41 PM
 
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The WaMu collapse has been in the works for months, though -- people have been talking about it for at least half a year. So it's not totally out of left field.

I agree with PPs that this is more comparable to the Great Depression, not Mad Max (one hopes, anyway). The frustrating thing for us is that we've got about 8 or 9 months before we move to our "permanent" location, where we'll want to buy a house, where I can finally set up a big garden with chickens and some food preservation (canning, drying) as well as storage for long-term pantry. Right now it's next to impossible to do any of those things, and I'm wondering if we'll be able to even get a mortgage this spring! (Our credit is great, but...TSHTF might render that irrelevant).

So I don't know what to do. At all.
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Old 09-26-2008, 04:00 PM - Thread Starter
 
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just my 2c. Today It hit me with Wamu... i dont know why, but it seems 3 biggies went down this week AIG, Merrill and Wamu, thats ALOT for one week.
I think this is the important key that makes this feel much different than, say the 80's. Small banks failed. Interest rates skyrocketed, but that meant that as long as you weren't borrowing you were okay... and I've never been a borrower. The cold war was still a clear and present danger, but we were not in a war that was costing billions upon billions of dollars.

Today, the stakes are higher and different. It's the combination of things. It's the stock market. It's major banks failing... and having multiple failures in a single week as growingsprout says. It's oil issues. It's the war that never wants to end. It's the threat of things like grain shortages, gas prices causing food to hyperinflate, a hard winter, crazy weather (tornadoes in Feb. last year, for example). Threats of terrorism. It's not one thing, for sure.

I grew up in the 70's. I remember the oil embargo. I remember sitting in line for hours with my legs sticking the vinyl in my dad's 59 Mercury to get a few gallons of gas. I remember when "regular" meant leaded gas, not "regular unleaded". I remember the inflation of the 80's very well (was an investor then already). The stock market crash in '87 is imprinted in my memory. This is different.

Typically, a depression is expected about once a century. We're getting due for one. I hope I'm wrong.

WaMu was possible for a while, but it wasn't imminent.

It is eerie for me to see history repeat itself. Near the end of the 8 years of Reagan ending in a stock market crash... 8 years of Bush ending in... economic disaster? Not sure yet.
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Old 09-26-2008, 04:02 PM
 
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Stockpiling food is not about the Mad Max scnario. It's about feeding people in times of crisis. Maybe your family is OK. There are lots of families who are not OK now, and more are in trouble every day. In the event of any disruption of distribution, my family will have enough to eat and I can help out my neighbors too.

I can't say much that hasn't already been said.

I don't watch my investments (401K mutual fund stuff). No point in making myself crazy.

True preparation means learning skills.

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Old 09-26-2008, 04:31 PM
 
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Stockpiling food is not about the Mad Max scnario. It's about feeding people in times of crisis. Maybe your family is OK. There are lots of families who are not OK now, and more are in trouble every day.
Oh, trust me, I know this. I live in a city with 28% unemployment and empty, foreclosed homes on every street. But it's been like this for four years here. So the "crisis" is nothing new to me.
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Old 09-26-2008, 05:31 PM
 
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I am a good investor. I have over 20 years under my belt and I've seen the peaks and valleys. This valley is different. This goes beyond my investments tanking.
Okay, this freaks me out. Velochic, I've always respected what you say here, and I've always appreciated your "sit tight, selling low is always a bad idea..." comments when others are nervous. But now you're nervous!

So what can I do? DH has a good job. I have a good part-time job. We have some money saved, but it's mostly in stocks (I figured because we're young, it was okay to put it in higher risk funds, and that we would move to more conservative funds right before our kids go to college or before retirement, etc). We haven't stockpiled, but we have a generally full pantry. Our cars are paid off. We have a mortgage, but that's it. Do we just wait and see? Or is there something useful we can do?

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Old 09-26-2008, 06:31 PM
 
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Oh, trust me, I know this. I live in a city with 28% unemployment and empty, foreclosed homes on every street. But it's been like this for four years here. So the "crisis" is nothing new to me.
Holy smokes! Those are depression era numbers.


I too am disturbed by Velochic's distress.

Amy at Stone Fence Farm
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Old 09-26-2008, 06:36 PM
 
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I'm no velochic but I agree that when she gets nervous, I get nervous too!

Until she comes along here's my impression: Sounds like you are on the right track with the exception of having a diversified portfolio. I learned the hard way during the tech boom and bust that no matter how young you are, you should always have a diversified portfolio which should include at least a percentage in lower risk funds like bonds. If your money is in actual stocks and not stock funds, you are particularly exposed to dips in certain industries without enough balance in others.

If you aren't diversified right this moment, I'd make a long term plan to get more diversified either through reallocation or new contributions. As to exactly WHAT your portfolio should look like, that's really individualized. While you can certainly hire someone (fee based) to help you, it is very important to understand what YOUR goals, risk tolerance, etc. is and to learn exactly what you are doing with your money rather than just depend on others for advice.

Hope that helps.
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Old 09-26-2008, 06:38 PM
 
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Originally Posted by avendesora View Post
Okay, this freaks me out. Velochic, I've always respected what you say here, and I've always appreciated your "sit tight, selling low is always a bad idea..." comments when others are nervous. But now you're nervous!

So what can I do? DH has a good job. I have a good part-time job. We have some money saved, but it's mostly in stocks (I figured because we're young, it was okay to put it in higher risk funds, and that we would move to more conservative funds right before our kids go to college or before retirement, etc). We haven't stockpiled, but we have a generally full pantry. Our cars are paid off. We have a mortgage, but that's it. Do we just wait and see? Or is there something useful we can do?

Aven
Yes! If Velochic ain't happy, ain't nobody happy!

Partner and I just started talking about reworking how we'll be doing things. I think we need to continue this conversation.

~Julia
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