Thanksgiving 2008
As Barry Corbin said in "WarGames", "I need a machine to tell me that...?" The economic news continues to be bad. Falling housing starts and prices, higher initial unemployment claims, lower orders for durable goods. Why are houses even getting built? I should find out Monday if I still have a job. I am remaining optimistic. Our investments are having a better week so far, our YTD backed off to ~-15% so far.
Thursday, November 27, 2008
Sunday, November 23, 2008
I slept better last night, writing a blog helped. I continue to obsess over what to do. Should I move part of our 401(k) money into stable value or MM funds? Not sure, my head says to ride it out. Greedy while others are fearful. My stomach says move a percentage into the stable stuff.
But, since stable value funds are run by insurance companies, how "stable" will they be? I want to wait until the planner meeting on Dec 10. Curious on what he says. "Stay the course". I wonder if he/she can say that with a straight face. I always want to ask how they invest their money.
Good decisions:
1. Exit the junk bond fund in 2007
2. Did not go 'all in' to the stock market the last time the planner said to (2007)
3. Did not buy the commodities fund at its high in 2008
Health, family, home, job, investments....in that order.
But, since stable value funds are run by insurance companies, how "stable" will they be? I want to wait until the planner meeting on Dec 10. Curious on what he says. "Stay the course". I wonder if he/she can say that with a straight face. I always want to ask how they invest their money.
Good decisions:
1. Exit the junk bond fund in 2007
2. Did not go 'all in' to the stock market the last time the planner said to (2007)
3. Did not buy the commodities fund at its high in 2008
Health, family, home, job, investments....in that order.
Saturday, November 22, 2008
planner meeting
Dec 2008
1. REIT?
2. Roth funds?
3. Sell to offset gain
4. Commodities?
5. What bond fund?
The planner posted his findings today. Unfortunately, they look just like last year. This person is expecting me to sell out of vtsmx in my IRA, assume the loss and buy bonds ?! When the planner reviewed our allocations, we were at 40% equity, 30% bond, and 30% reserves. Liquidate TIPS and buy vbmfx? No, inflation WILL return and when it does, having some TIPS will be a good idea. V is pushing diversified equity (again as well).
1. REIT?
2. Roth funds?
3. Sell to offset gain
4. Commodities?
5. What bond fund?
The planner posted his findings today. Unfortunately, they look just like last year. This person is expecting me to sell out of vtsmx in my IRA, assume the loss and buy bonds ?! When the planner reviewed our allocations, we were at 40% equity, 30% bond, and 30% reserves. Liquidate TIPS and buy vbmfx? No, inflation WILL return and when it does, having some TIPS will be a good idea. V is pushing diversified equity (again as well).
bear 2008 vs 2002
What worked in 2002:
value - financials
REIT
health care
Cargill ESOP
small caps
emerging markets beat out developing markets
usual suspects...bonds, MM, even junk bonds made money
What happened? Coming out of the dot com years, financials and real estate accelerated into bubble2. In 2008, nothing escapes except treasuries. David Swenson nailed it. In times of crisis, everyone flocks to the US.
What worked in 2002:
value - financials
REIT
health care
Cargill ESOP
small caps
emerging markets beat out developing markets
usual suspects...bonds, MM, even junk bonds made money
What happened? Coming out of the dot com years, financials and real estate accelerated into bubble2. In 2008, nothing escapes except treasuries. David Swenson nailed it. In times of crisis, everyone flocks to the US.
bear nov 2008
Where we're at:
SandP: 800.03
DJIA: 8046.42
10 yr (^TNX): 3.167
SandP P/E: 12.25
cash: 40%
equity: 30%
bonds: 30%
YTD: -18.30
Musings:
Job:
I'm still waiting to hear whether I'll still have a job in January 2009. TXT-CSNA announced a layoff of 500 people this month. One person in our group volunteered to be let go. I hope to hear something before Thanksgiving. Assuming out project goes live, my job should be safe. A new person starts this week. It still seems ridiculous to hire someone else when others are being let go. My wife's job appears to be safe. Fortunately, we both work in different industries.
Investments:
I keep waking up at 4:00 am thinking about ideas to recover some of our losses. My head says I'm doing the right thing, but the emotions want to run for cover. I have to remember why we bought what we did and the fundamental reasons why we would sell. This week Jubak says we may have been in a secular bear since 2000. That seems correct, IT treasuries have performed better (~5.5%/yr), than VTSMX (~1.2%/yr) over 10 years.
Thoughts:
I set up an alert to tell me when IT treasuries return to their Aug 2008 levels. When they do, I'll switch out of VBMFX and into them. We'll continue making equity purchases only in 401(k) and IRA accounts. Transfer DWS MUNI to V treasury during Dec. Sell off equity to apply to earlier gains. David Swenson was right, treasuries are the place to be in a crisis.
SandP: 800.03
DJIA: 8046.42
10 yr (^TNX): 3.167
SandP P/E: 12.25
cash: 40%
equity: 30%
bonds: 30%
YTD: -18.30
Musings:
Job:
I'm still waiting to hear whether I'll still have a job in January 2009. TXT-CSNA announced a layoff of 500 people this month. One person in our group volunteered to be let go. I hope to hear something before Thanksgiving. Assuming out project goes live, my job should be safe. A new person starts this week. It still seems ridiculous to hire someone else when others are being let go. My wife's job appears to be safe. Fortunately, we both work in different industries.
Investments:
I keep waking up at 4:00 am thinking about ideas to recover some of our losses. My head says I'm doing the right thing, but the emotions want to run for cover. I have to remember why we bought what we did and the fundamental reasons why we would sell. This week Jubak says we may have been in a secular bear since 2000. That seems correct, IT treasuries have performed better (~5.5%/yr), than VTSMX (~1.2%/yr) over 10 years.
Thoughts:
I set up an alert to tell me when IT treasuries return to their Aug 2008 levels. When they do, I'll switch out of VBMFX and into them. We'll continue making equity purchases only in 401(k) and IRA accounts. Transfer DWS MUNI to V treasury during Dec. Sell off equity to apply to earlier gains. David Swenson was right, treasuries are the place to be in a crisis.
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