I am feeling better about my position in the stock market.
Before Wall Street opened this morning my financial advisor called me regarding the email I sent over the weekend explaining I wanted to make changes in my portfolio.
It turns out I have been reading my monthly statements wrong. I thought I was 98% in stocks and 2% in cash/cash equivalents...but it is 98% mutual funds (and I think I need to relearn what mutual funds are.)
He said I am actually about 50/50 in safe investments and stocks. I have about 7% in mutual funds, 7% treasury bonds, 21% bond funds and 8% in cash. The rest are also in mutual funds...but mutual funds that are losing money so maybe aggressive mutual funds? Is that possible?
He told me that the conversation we had about a year ago where I said I wanted to go more conservative was a good move because now I am 50/50- but going more conservative will mean missing the upswings of the market.
So after talking to him...I felt better that even if the market tanks, 50% of my money is safe-and so I did not change anything in the portfolio.
I was expecting the market to increase today with the news of the bailout- but the pullout of foreign countries has tanked the market some more- once again what I THOUGHT would happen did not...so oddly enough it makes me feel better that maybe my fear of the market collapsing is unfounded.
ummm...in other news- that house pic I posted 3 days ago explaining BB and I love it- dropped 40k in price last night. It's only been on the market 2 weeks! BB and I are bummed believe it or not- because now someone is sure to sweep it up before we can get out to see it in November. Plus- now it is in a price category that tends to tell me the neighborhood is really bad...so that is disappointing as well.
My stock market portfolio
September 29th, 2008 at 02:39 pm
September 29th, 2008 at 04:02 pm 1222704143
September 29th, 2008 at 04:28 pm 1222705688
Mutual Fund is basically you and a lot of other investors pool your money together and have a portfolio manager decide the stocks or bonds to invest on your and the other investors behalf. They usually charge a fee based on assets in the mutual fund. So if it's a billion dollar fund and they charge a 1% fee, they will collect $10 million a year.
A good place to start is look at the prospectuses for the mutual funds you invest in. They will go over fees and what they invest in. You an also go to morning star and read about how they stack up against similar funds (I look at 5 and 10 year returns).
You should feel comfortable enough with your financial adviser to answer your question no matter how dumb you think they are. Again, you should always know what you invest in.
I ask dumb questions all the time. Just ask my wife. We met with my lawyer and I was asking the dumbest questions about setting up trusts and estates. But at the end of the day, I understand my will and trust and am comfortable with it.
September 29th, 2008 at 05:50 pm 1222710623
However, I wouldn't worry about the daily fluctuations of the market. I believe the upswing he's talking about is over the course of many years.
As for today's market, it's most definitely down, largely because Wachovia has gone belly up. But what's not on the front page of the news is that both the Basic Materials as well as the Energy sector is down even further than financials. So, it just goes to show that what's making the biggest headlines isn't always what's causing the market to gyrate the way it does.
That and the bailout plan has yet to be officially passed. I am fully confident that it will, but the details are still being ironed out.