Monday, October 06, 2008


WARNING: Boring financial post ahead.

Some number of months months ago my financial adviser called me to tell me that he saw a decline in the housing market and stock market coming. That he wanted to start selling off a lot of the more volatile stocks, like financial and consumer goods, to acquire cash. That way when the market hits bottom, he would have the cash to get back in and make some, hopefully, very profitable buys. Today I received the call that he felt things are starting to bottom out and soon he would start buying again.

(FYI: Warren Buffet has started to buy again too, so that's an even better indicator things are bottoming out. The old saying of "Follow the money" holds true, because Buffet has A LOT OF money.)

I asked him why, like I always do. He mentioned certain economic indicators that indicated the market was nearing it's low. I asked him what they were and what did that mean? He took the time to explain things to me, like he always does.

So very soon he would be taking some of the cash and start buying some of the UNDER priced stock. He also predicted that oil would stabilize somewhere around $85-$90 a barrel. Today oil is $88 a barrel. Of course I told him fine and that what ever he held felt was the right things to do, because so far he's done me well. I also made sure, again, that he hasn't been selling anything and was just waiting out this financial crisis. He confirmed that yes, he had been standing pat as he felt that way and reminded me I had previously agreed with him to do just that. He also reminded me that we agreed that all of the losses are on paper until we sell. Then they become real.

Here's the advise part!

DISCLAIMER: Take my advise at your own risk, because I know very little about financial stuff. Why do you think I have a financial adviser handling my retirement accounts?

So sit tight on your 401k's and any other investments you may have until this crisis is over. It ain't a loss until you sell at a loss. If you sell now, you really have lost the money, but if you wait until this thing blows over and the economy starts recovering, the value of your investments WILL start going back up. It always does and then you haven't really lost anything after all. It was just all on paper.

Check back with me in a month or two to see if I'm still this calm. LOL


Barbara said...

i plan to sit and wait....and buy shit to help the economy. perception is reality:)

Monogram Queen said...

Yep that's exactly what I am doing, sittine and waiting.

Thankfully I dumped my Wamu stock and changed my 401k away from Wamu a long time ago!

TUG said...

Glad to see I'm not the only one not in a panic over this. I'll need to write a post about what I think about all this crisis stuff.

Misses M said...

Fortunately my 401K is still in great shape... and I didn't even lose any money from my company stock! I suppose that's one of the benefits of grocery stock... people gotta eat. It also helps to be married to someone who majored in accounting and finance... I wouldn't want to be making these decisions all by myself.