Thursday, November 20, 2008

Financial Limbo Rock

I'm probably showing my age here, but I still remember all the words to Limbo Rock, including the chorus:

"How LOW can you GO?

Do the Limbo rock!"

Not that I was ever much of a dancer, but financially, it's clear I can go pretty dang low.

Today when I checked my 401(k) balances, they were below $100,000.

Did I mention that on October 9, 2007 they stood at $174,518?

Did I mention that I've been faithfully depositing $1000 per month through December, 2007? And after that to this very day, I have been depositing $1025 per month?

Did I mention how very scary this recession is? And how worried I am that my projected recovery time of 9 years might not be enough?

I'm ready for THIS dance to be OVER!


Anonymous said...

You may be looking at a down market for another 3 years. As of today, the last 12 years of investments have been wiped clean.
My advice is to stop putting money into the stock market and deposit that $1025 into a savings account. As deflation takes hold, the only thing that will have value and go up, will be money in the bank, because it can buy more as prices go down.
Once you get a good amount into savings, open up laddered CD's. When the market comes back on the upswing, you can jump back in.
Just my 2 cents. For whatever it's worth. But it's time to stop being the deer caught in the headlights.

Grace. said...

M, Please keept responding to my posts. I value your opinion. But in this instance, I don't agree with it--frankly I cannot afford to agree with it. I think I'm looking at 18 months max of a down market, but I'm hardly an expert in these things. All I have to go on is history, a hope that it will, indeed, repeat itself.

Anonymous said...

Grace, the last depression (1929) stocks didn't recover for 27 years???? I'm not saying to invest, I'm just begging you to hold off for a while. Put the money in a savings account. What if the Big 3 auto makers go under?
I don't know what you are invested in. But Dave Ramsey gave the best advice: ask yourself if you had to do it all over again today, would you buy what you are buying? If the answer is no, than run to a savings account.
We're not young chickens anymore. Time is not on our side.
Good luck.

Retired Syd said...

It is extremely depressing, isn't it? I understand what you're saying about needing the market to return, not being able to afford to park the money in cash. I'm in the same boat (only worse being retired already!)

I wouldn't be able to afford being retired on the returns that cash would earn and I won't be able to afford retirement if the market doesn't come back, so we're both stuck in that relying on history thing.

I'm with you, hoping it doesn't take 27 years!

Kemkem said...

As of today, l am reducing my contribution on the 401k to just the company match which is 5%, maybe l can use the extra few dollars to pay some bills. 27 years?? sheesh..l hope not!

Jerry said...

Did I tell you that you are amazing?? That is fantastic that you are contributing as much as you are. I think the market will turn around. We don't know when but I don't think things are as dire as The Great one...Just my 2 cents and I'm certainly not an expert but there are plenty of experts that are saying the same thing. There's no insurance no matter where you put your money. There's always some level of risk. However, I think this downturn will lead upwards. It always does.


Anonymous said...

I have to share with you this great joke I heard by Woody Allen:

Guy walks into a psychiatrist office and says "Doc, you gotta help me. My brother thinks he's a chicken."

The Doctor advises the man "Just tell your brother, he's not a chicken."

"I can't" said the man. "I need the eggs".

Living Almost Large said...

I'm with you grace, still investing. Have you considered however getting out of your 100% stock portfolio?

Do you regret it now? Ouch.