Who is one to believe? We hear talk that the recession is worsening and is really a depression. We also hear that the recovery has begun but that it will be slow and painful. I personally believe that talking about how bad things are leads to a certain paralysis and feeling of inevitability, that we're doomed so draw in the drawbridge, batten down the hadges, and get ready for a wild ride. I'm opstimistic. I'm with Kohl stores who, while cutting back their planned expansion, are expanding 75 to 100 stores per year.
I have a defined contribution pension plan courtesy of Long Beach Community Hospital and Harbor Regional Center. (We're talking stock market & mutual funds here) Every once in a while I actually look at it. The investment decisions for the plan supposedly take into account my risk aversion and retirement needs. For all intents and purposes, it is a closed plan because I don't put additional funds into it and so far we haven't had to take money out either. So I kind of look at it as my "economic pulse". The index for this fund went from 1.11 on Oct 1, 2002, to .759 on Feb. 1, 2009 to .885 on Sep. 1, 2009. To put a shiny face on these numbers:
| 10/1/2007 | 1.111 |
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| 2/1/2009 | 0.759 | -0.352 | -31.7% | 16 | -2.0% |
| 9/1/2009 | 0.885 | 0.126 | 16.6% | 7 | 2.4% |
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We lost 31.7% over a 16 month period or 2% per month. In the last 7 months we have gained 16.6% or 2.4% per month. That looks like a turnaround to me. Modest,yes, but still a turnaround. And, of course, this is only one fund among millions.
Indications from our portfolio indicate the hemhorraging has stopped, but the patient is still in the ICU.
ReplyDeleteI guess it's a good time to be poor. With very few investments I'm hardly losing a thing, and inflation just makes the debts look a little less bad. :)
ReplyDeleteI would consider taking some of the recovery money out of the stock option and put it somewhere else. But where??? Nothing seemed "safe" in the last downdraft. How many choices do you have? International funds? Dividend funds? Bond funds? TIPS? They all went down last time. But is there a place for plain cash? Long term bond funds will get hit hard if/when interest rates go up. Three-month treasuries don't pay any interest! But at least you get your money back, so far anyway.
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