Stupid Economy Question, Stupid

I didn’t know we ever came out of the first “recession”. But I don’t know much about the economy. Except that some predicted just about everything that has happened over the last 7 years in 2000, before 9-11.So if 14% of my money is allocated to money market accounts, does that mean I’ll lose it? It’s been steadily going up over the last year, but yesterday was the first time I’ve looked at the account in awhile. I guess I should learn about this stuff. I know I sound like a fucking idiot.

Your money market account should be fine — anyone who has their investments in mostly cash will come through this okay. Like a savings account, money market accounts are very safe investments, and they’re covered by the FDIC. In fact, some money market yields might actually increase even though the Fed will (hopefully) cut interest rates next week.

Sorry for the stupid question, I have tried several times to go over this stack of stuff in front of me, and I swear I start to doze off every time. I guess I’d better just bite the bullet and take the time to find out what the fuck all my money is in. Thanks, Bob.

Some of the money market accounts (i.e. Wells Fargo) ARE “sweep” funds so yes they will be affected to a degree. AT least Wells Fargo used to be that way, which is why we changed. True Money Market accounts are not SWEEP funds -Any cash in Schwab/Fidelity and that type of investment fund should also be fine but if the Financial Institutions for investment take a hit, your “dividend monthly” will probably drop from the 8-9% Annual Yield.401K’s will probably drop dramatically depending upon your stock/bond mix.The people who will take a real hit are people who make changes right now. The key to riding out this type of recession is to sit tight, change nothing and hold your breath. If you hold a stock or a fund, you do not lose anything until you actually sell. What goes up must come down and vice versa.Hold your nose and if it is possible, ride it out. This is not a good time to sell. You can alter your portfolio (decrease stock/increase bonds) for example but you will take a hit on your lower priced stock.I’m not an expert … but I’ve ridden these out before…hopefully it will correct itself. If nothing else, a huge recession will result in a massive Dem sweep in 2008 electionability.

Isn’t that awesome? That idiot opens his mouth and it hits the markets as hard AS THE 9/11 ATTACKS.All I’m hearing on the radio every hour is how everyone is bracing for the opening bell tomorrow.A Dem sweep would be awesome, but they may inherit a shattered economy and if there is anything the Republicans are good at, it’s putting the blame on someone else.

Great advice, basheert. I’m personally increasing my positions as the market declines (Apple is trading in the low 160s upper 150s right now, which is a BARGAIN). But I’m just a stock market stupid so I only do what the experts tell me to do. Is buying into the decline a good plan?

Bob – we have had a financial advisor for over 20 years – he’s basically educated me! Most of our available “readiness” is in a basic Schwab account where we keep liquidity and also buy/sell stocks. Our pensions (multiple) are pretty much diverse and in everything so we’ll take hits but we will also probably do well.I definitely buy down – my stocks are not growth, they are dividend payers. That is where you make money…not in expecting the stock to increase. I have 2 stocks that I began with 150 shares and are now over 300 yet their value is the same. I do it all on regular quarterly 7% dividend payment/reinvestment.I believe in todays market (and please don’t take advice from ME) that if you want to have a steady return, you must be involved with stocks that remain stable and pay regular dividends that you reinvest!For the last year, my main regular growth stock has been TPP (Teppco). They are a company that builds oil/gas pipelines. When the market goes down, they go up because of their business. Their quarterly dividend is approximately (and never has been less than in the last 3 years) 6.5% per share which is immediately reinvested. The price is approximately $39-$42 per share and does not vary significantly. Your return is strictly based upon dividends.That’s how we play it … but again, this works for me and maybe not for everyone. Dividend reinvestment is a solid way to get a good return if the company has a long track record. I would not (for myself) buy a stock based upon it going up which is why none of our portfolio has anything but dividend stocks.I am not saying to anyone to buy a specific stock…just don’t sell right now. Losses and gains are paper only until you do something. When you sell you lose if you sell short.Good luck everyone!It’s gonna be a tough ride…

CORRECTION: TPP pays .65C per share regularly. Just to clarify. It has been as high as .70C quarterly but generally .75C per share is a regular rate of return!!! Sorry!!

You’re exactly right about dividends. Two of my positions pay a decent dividend, the rest are tech and speculative plays which don’t pay divs. Oh, and my account is with Schwab as well. You can’t beat their 4% yield on the investor checking account. And their mutual & index funds are solid. I own four of those. Not so solid this year so far, though. I’m gearing up for the pain tomorrow.

Bob, just ignore the bad news. It actually only affects you if you panic and sell. Of course your portfolio drops in value, but with time and patience, it will regain most of what it loses in panic-selling.I remember a couple of years ago that everyone was panicking and selling stuff off. We were SO glad when all the inexperienced day traders got out. The market settled back in and normalcy came back pretty quickly.We use Schwab as well – when I’ve looked at Money Market Accounts and CD’s, I’ve just laughed. It’s an absolute waste to put money into savings accounts if you have investment dollars. CD’s have been ripping the elderly off for years – you plunk your money into a CD @ 1.00% and the banks were making a 10% return….on YOUR money. But I realize for many people, it’s all about security and not about investing.And then again, if you really want to actually make money, a bit higher risk is the way to go.(by the way, WELCOME WELCOME WELCOME to the SuzieQ blog!!! – We are SO excited to have you!!!)

Wow, I felt like an idiot before, but now it’s clear I’m not even close to being elevated to idiot status. Thanks for writing all that out basheert, I think I’m going to print it out so I can try to understand what the fuck it means. I’m so stupid about this stuff, I know absolutely nothing. I didn’t even pick out my portfolio, my Republican asshole ex-boss did it for me, so I literally have no clue what my money is even in. I know I have TIAA-CREF, and that I have 80% in a TIAA traditional account, 5% in a CREF Inflation-Linked Bond, and 15% in a CREF money market account. That’s all I know, and I don’t even know what it means! I’m just freaking out because this is all I have, personally. So, I’m assuming I just shouldn’t do anything right now. Except my homework, lots and lots of homework. Thank you guys.

OMG if you have TIAA-CREF you are sitting pretty! Let it ride … seriously! We still have a nice sum sitting there since Hubs left the U … the TIAA-CREF matching is amazing (hope you got in on that). It has appreciated unbelievably in the last 20 years and we are now pulling out some at a time and putting into funds we can control.It also is NOT touchable in divorce proceedings EVER…ironclad.Also, it is very possible you cannot move it. TIAA-CREF has tons of rules/regulations. You would be limited to amounts you could take and we found THEIR investing far superior to what we could have done.Hope this helps. We’ve had TIAA-CREF for over 25 years.

Wheeww! Thank you for saying that. This topic has completely derailed me several times over the last few days. I don’t know about matching, but I was told that it was one of the best conservative options we could put together since I didn’t want to have to fuck with it. I think I can move it around within account, but if I request any kind of payout at all it’ll cost me 25-30% total in penalties and taxes, but I haven’t had a need to do that yet. This is me talking out my ass and only reiterating what I’ve been told, so I could be wrong.I do know about all that stuff, they make it very clear when you sign the papers. I don’t really have to worry about that since we don’t live in a state where they recognize domestic partnerships, and if we haven’t bothered getting married after 13 1/2 years, I doubt it’s going to happen unless it’s for a specific financial reason, and this ain’t it!It definitely helps, thank you. I don’t feel so manic about the little bit of savings I do have. Thank you so much.Bob just has the best supporters!

Inbno13 – can you email me please? I have a question for you.doxwife2@gmail.com