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Orchard
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Post by Orchard »

jfrazierjr wrote:
Orchard wrote:
Azhrei wrote:
kat2cute wrote:Luckily, I didn't have a huge amount invested, but that fact makes me hesitant to withdraw it because of the $10 trader fee for selling (which is a big chuck when you only have $250 worth of stock)

It's only $250. Leave it there and watch it mushroom in about 9 months. :) (Well, depending on what you invested it in.)


Not being a financial expert, that's my advice. Do you have any idea how much its hurting to leave my 401(a) and 403(b) alone? I've contributed a fair chunk of change (as has my employer) to these accounts, only to have them lose thousands of dollars in under a year. OUCH! But I know that in the LONG RUN, I'll be glad I was buying NOW while the stock market was low. I don't open the statements, I don't look at them, and I don't even think about it if I can help it. I just tell myself that things will be better in 30 years or more when I NEED the money, and then I'll be really glad I invested a lot of money when things were at the bottom. Buy low...


You should be far more worried about possible changes in law that would effectively abolish 401k programs by the Democratic controlled Congress. Unless we are seeing the emergence of a vastly different economic paradigm(this is assuming the government does not force such upon us!), the stock market will recover and still beat any existing government investment growth rate by 2-4 times over the long term(20+ years). One thing to consider is that the stock market(DOW Industrial Average) is now at about the same level it was around 1997 or so. Some of the best money market return rates hover around 14% per year on a 20 year cycle. Now, unless we have a depression on the scale of the 1929 crash, you don't need to worry about the long term growth rate... and if we DO have such a crash, you still should not worry about it because you will be to busy trying to find a job at 1/4 your pay if you can get one.


Of course, that's assuming we all have a long term, of which I am not so sure.... but that is a totally different philosophical(religion actually) question.


Well, if we don't have a long term, then I'm not going to be worried about having lost a bunch of money. But if we do, and I didn't save, then I'm screwed. It's Pascal's Wager, only this time the eschatalogy of things is the gamble, not deity. If I bet on there being a long term, and I'm right, then I've been wise by preparing for it. On the other hand, if I bet on there being no long term and don't prepare and there is, I'm screwed. On the flip-side, if I don't prepare for large-scale disaster (emergency preparedness) and it happens, then I'm screwed, but if I do prepare for it, and it doesn't happen, I've lost very little. Again, it's better to bet on the possibility of things for which you need to prepare for, since the consequences of failure to be prepared are frequently catastrophic.

As far as law changes--I'll agree that it's possible that congress might change things up enough that my current savings are screwed--but I'm hoping that I'll have enough warning to pull out before that happens. That's all I'm going to hope for.
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Goumindong
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Post by Goumindong »

jfrazierjr wrote:You should be far more worried about possible changes in law that would effectively abolish 401k programs by the Democratic controlled Congress.


You should be far more worried about your paranoid delusions. Seriously, get that looked at.

P.S. your "government investment" comments are also very far from the truth.

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Azhrei
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Post by Azhrei »

jfrazierjr wrote:You should be far more worried about possible changes in law that would effectively abolish 401k programs by the Democratic controlled Congress.

Sounds like you read something on a conservative blog and believed it without checking things out. Tsk, tsk. ;)

My brother sends me "news articles" all the time that are nothing more than some fool's opinion on some other fool's interpretation of what he thought he heard on TV.

Sheesh! I get more stupid stuff from family members than anyone else! I've stopped sending them links to the snopes.com pages because if they don't care that their minds are filled with garbage, then it's certainly not my job to take out the trash. Too bad for them, I suppose, since they will continue to live in delusion. :)

Now back to kat2cute's question. Let's say you spent $500+$11 and you've got $250 left now. I suggest you spend another $250+$11 on a blue-chip stock. It'll likely go back to the level where you bought your $500 and you will have increased your money by 33% (actually $511+$261 would become $1000, so it's more like a 30% gain to get from $772 to $1000).

The obvious question is, "Do you trust the stock market in the long term?" The historical answer should be "yes", although there are caveats, such as not putting all your money into the market at one time since you lose market averaging. But given that we are at -- or very close to -- the bottom of the market right now, the only place to go is up. Unless the company fails completely. ;)

I have a bunch of IBM stock right now. And Apple has a huge cash reserve and a good market stance so I bought some of them as well. (But they're both priced at almost $100, so that's probably a bit much.)

The bank stocks are really taking a beating right now (doh!), so if you pick someone large and relatively secure, it should be a good bet. BoA and JPMC are the obvious choices. And BoA stock is at $12 now, a far cry from the $54 it was at just 18 months ago or so. I've got a couple grand sitting in an IRA cash account and I'm thinking of buying more of them. Even if it only goes to $20, I will still have doubled my money. I'm also looking at a commodity stock, FCX (Freeport). They're short-term outlook is only average, but over the next 5-10 years they could be a huge moneymaker. :)

None of this is financial advice, of course. I don't know diddly about the stock market, but I can read some basic charts and graphs and I know a little of the lingo. That's about it. Oh, and I can use the stock search tool that my online account offers. :)

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Post by Goumindong »

Orchard wrote:I'm glad you feel that way. I really am. But the simple truth is that the perception of a lot of people on the right is that there are people on the left who do want to do that. Whether there are people on the left with that explicit goal or whose goals imply that OR NOT, the perception that they exist is a very serious problem. It is a problem that BOTH sides should move to address because it is going to keep them from working together as effectively as they could.


Whether or not its true is important. Because if its not, then it means that people are simply falling for demagoguery and lies. Allowing gay marriage doesn't force anyone anywhere to accept married gays. All it does is change the legal framework of benefits for partnership to include same sex couples. The only reason it has to be called "marriage" is because that is what the law calls that framework of benefits for partnership and because separate but equal is inherently not equal.


I don't know if anyone remember's Aesop's Fable about the wind and the sun making


The problem is that the Sun has tried to warm the man and he refuses to take off his coat, he simply adds more layers. Innocuous methods have been tried for decades but nothing works, it drives the people back into their cocoons.

The fact of the matter is that all social changes in the past 200 years have been hard fought. Slavery? We fought a war over it. Workers rights? We pretty much fought a war over it. Womens Suffragists were even arrested for their efforts. I shouldn't have to explain what happened during the Civil Rights movement.

As well, the courts have always been the method, as ordained in the constitution, that citizens have to petition the government and to make the minority voice heard.

The movement against gay marriage is built, nearly entirely on a falsehood. The only thing that isn't false about it is that it is a religious belief of some people. Everything else, from the bibles prohibition, to the claims of "forcing beliefs on others" to the slippery slope arguments commonly used, to the claims of bad parenting, to the claims of the end of society, are lise. [The bible has no specific prohibition against it that can be attributed to any relevance above other laws that are ignored. Hell, even the Jews, as in, the guys who wrote the book in question have no problem with homosexuality, but understanding that would mean actually understanding the history of Christianity and is so verboten]

edit: Acceptance doesn't come until integration.

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jfrazierjr
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Post by jfrazierjr »

Goumindong wrote:
jfrazierjr wrote:You should be far more worried about possible changes in law that would effectively abolish 401k programs by the Democratic controlled Congress.


You should be far more worried about your paranoid delusions. Seriously, get that looked at.

P.S. your "government investment" comments are also very far from the truth.



I could say the same about your God complex.

As for your second statement, well.. since it has been established that you are omniscient, please enlighten the poor stupid people.
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Post by Goumindong »

jfrazierjr wrote:
Goumindong wrote:
jfrazierjr wrote:You should be far more worried about possible changes in law that would effectively abolish 401k programs by the Democratic controlled Congress.


You should be far more worried about your paranoid delusions. Seriously, get that looked at.

P.S. your "government investment" comments are also very far from the truth.



I could say the same about your God complex.

As for your second statement, well.. since it has been established that you are omniscient, please enlighten the poor stupid people.


I have no God complex, i know my limitations. However, if you believe that "a democratically controlled congress is going to abolish 401k plans" then, yes, you have some serious issues you need to get looked at.

Regarding "government investment"

1. You're making the positive claim. That means you need to back it up.

2. Government investment is no different than any other type of investment, public officials are no more gifted at allocating money than wall street money managers.

Now, i suppose you could be referring to investing in government, which might have that problem, but actually doesn't and a basic understanding of how risk modifies markets would make you see that. Government bonds are very stable and short term. They are pretty much the most stable investment that you can make. The risk in other endeavors drives price and expected returns up.

Now, right now, they might be a bad investment[or good, depending on how well the govt controls deflation], but that is more because the stock market is at historic lows. Companies that should be trading at 10-20 times their yearly revenue are trading at 1-3 times their yearly revenue. Which means huge growth potential, even with a lot of risk.

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kat2cute
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Post by kat2cute »

Thanks for all the stock advice. I know now (or soon) is a great time to get into certain segments of the stock market. Take Platinum for example: If you thought gold prices were down, platinum has fallen even more; and it is much rarer, and has many more uses in both current tech (Catalytic converters for cars), and future inventions (my thesis topic, bulk metallic glasses, to name one). But my question was about the short term. I plan to buy a house in about a year and think I would want most of my money to put towards a down payment. Should I withdraw my investments (which are small amounts of $250 per stock) and deal with the short term loss (plus $10 service fee), with the belief that the market will not have recovered even back to its current level in a year? Because the alternative is withdrawing it in about 1 year from now. I hate to be one to bail when things get scary, but when the short-term matters, it is rather an unacceptable risk.
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palmer
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Post by palmer »

kat2cute wrote:Should I withdraw my investments (which are small amounts of $250 per stock) and deal with the short term loss (plus $10 service fee)


Simple question. How much difference is that $250 going to make to your down payment?

Not a whole lot, I'm guessing.

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Azhrei
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Post by Azhrei »

palmer wrote:
kat2cute wrote:Should I withdraw my investments (which are small amounts of $250 per stock) and deal with the short term loss (plus $10 service fee)

Simple question. How much difference is that $250 going to make to your down payment?

Not a whole lot, I'm guessing.

That's what I thought until I re-read her post and the part you quoted; she specifically says, "small amounts of $250 per stock". But doesn't say how many stocks are involved.

Will the market be back in 12 months? Tough to know. My personal feeling is that much of the market will recover by next summer, but not all of it. So it all depends on how you're invested. But if you're going for short-term, you may as well pull the money out and put it into a 6-mo CD. At least you'll get a guaranteed return rate and you're money will have a clearly defined point at which it will become available. (You can pull it out sooner with a penalty; you probably don't want to do that.)

You could also look for a municipal bond fund. Here in Florida income on municipal bonds is not taxable on the state intangibles tax (yes, Florida has a state tax, it's just not an "income" tax) and many munis are free from federal tax as well. So a 5% yield is actually a point or two higher depending on your tax bracket. But investigate those closely as the details vary from state to state.

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Post by Goumindong »

kat2cute wrote: Because the alternative is withdrawing it in about 1 year from now


Its a toss up.

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