Recent activities

As a result of the recent economic news I have taken a few actions.

• The first action was to do nothing. I sold no shares within my 401K or my wife's 403b. In my last post I describe how this drop in the market could really be the sole reason as to why we hit our goal. Buying low is really the key. My wife and I have also decided to put our yearly raises into our retirement accounts. This will give us a nice boost. My wife found out that she is going to receive a 7% raise. NICE!!!! I have not found out what I am going to get but I suspect it will be between 3-5%...


• I changed our future contributions to our retirement accounts. Both my wife and I now contribute 25% to bonds or some sort of fixed income investment for our retirement accounts. I just feel more comfortable with this for the long term.


• I also started watching the first 25 minutes of "Mad Money". I believe that Jim Cramer offers the best economic and market commentary around. I don't watch the entire show but just the first 25 minutes. The later part of the show gets into the quicker stock picking recommendations that are of no value to me.


• Today I did something out of the norm. I purchased a few shares of JNJ (Johnson & Johnson) , KBR and KO (Coke) stock. These companies were to good of a deal to pass up. I have regretted not buying after the last crash after 9/11 and didn't want to sit on the side line for this one. Only a small amount of shares each. I am also watching Apple, inc. It is my opinion that many good companies have been dragged down by the market but for no other good reason. Some of these are down over 50%. That's a lot of upside potential over the next year or two. These are long term positions.

Monthly Update for Sept 2008

Not much to say for this month. Net worth loss of about 2%. Down to $201,516. A loss of about $4K from last month. The hysteria of the news and what is going on with our economy is scary to say the least. I have resisted the temptation to change my plans so far. All I wish for the Govt to do is to give an honest, hardworking saver like myself a chance at making it. Thus far I plan on keeping to my current plan. To recap, the plan is to max out my Roth IRA and contribute about $450 a month to my brokerage account from now until December. We are also going to keep our contributions to our 401Ks. I set that plan prior to all of the market "crisis" news of late. I have so far decided to stick with it and am telling myself that I am buying low. For our 401K and 403B plans I am more easily able to go along with the long term investment plan. For my taxable brokerage account I am having hesitations. For now I am going with the buy low mentality. I am considering at least looking for a bond position for my taxable brokerage account. Maybe even adding to my cash position. Seems easier to add to cash with a 3% guaranteed return versus buying a bond fund. I am amazed at how many people I work with have sold all their retirement holding and moved them to a cash position. They did this mostly after the market had lost over 10%. And worse is that these people are more than 10 years away from retirement.


I have also had a thought that all this economic mess could be the very reason why I end up hitting my goal of $1Million in the next 9 years. If I can buy shares at a much reduced price for the next 12-18 months maybe that will help me catch up. If in 2010 the Dow Jones reaches 14,000 my portfolio would have essentially exploded upward. Maybe that's just me trying to be positive.



I have also run some numbers at paying down my mortgage versus contributing to a taxable brokerage account. $1200 a month to a brokerage account or to my mortgage. What to do. In theory if I earned 8% on the brokerage account the choice is obvious. If I paid down my mortgage for a few years and then tried to refinance I could lower my monthly mortgage bill. Right now it's about $2,000 a month. There is also an emotional aspect to paying down the mortgage. A certain comfort. However, it also ties up your money. These are the things that race through my mind at times.

Hanging on one week at a time...Thinking long term...trying to do the right thing...