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mixed bag

February 1st, 2008 at 04:24 am

Saving log - $8 tip box
Spending log - $60 dinner (for two)

Was treated to the coffee and lunch, so I paid it forward and treated sweetie to a restaurant dinner. It included a very good folk singer/ satirist, so it was appetizer, dinner, dessert and a show.

It was a good antidote to the general craziness at work. Right now I'm just buzzing, thinking of all the things that I have to do. I have to calm myself, see what has to be done, and work my plan. I even went so far as to consult the I-Ching which told me to center myself, work the details and don't draw too much attention to myself.

DJ friend asked me to look at his 403B plan to identify a fund that is too crazy. Sounds a bit terrified that his 403B is dropping with the stock market. Said that his DW lost 100$, so she put everything in cash. Its hard to advise someone so risk adverse; they really can't put it in anything but cash so while they keep the numbers from obviously dropping, they don't see the stealth effect of inflation. The numbers stay up, sure, but when it costs twice as much to buy something in 18 years (at a 4% inflation, using the rule of 72), you've lost a lot.

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I wonder if giving him an exercise would help - ask him to track his 403B total daily for a couple of weeks. It will go up, it will go down, it will go up again, it will go down. The idea would be to show that a $100 loss is nothing compared to the variation that those weeks would show. Of course, it might could freak them out even more.

3 Responses to “mixed bag”

  1. boomeyers Says:

    She put everything in CASH? Yikes! Is she going to bury it in the back yard, or just stick it under the bed?? Just kidding! But really, unless they are retiring soon, why the panic? What goes up will come down and what goes down will come up. Murphys Law!

  2. baselle Says:

    Actually you want assets of value to go down so you can buy them cheaply. Love it when decent stocks go down so when I buy more and they eventually go up it doesn't take much to make money. If you buy dividend stocks, its even sweeter. The dividend is based on the number of shares you own. You are being paid to hold the stock even if the stock price is flat. A decent company, undervalued by the stock market, pays a stable dividend, which if the stock price is low, means that if you reinvest the dividend, it buys more stock.

    It does take a certain faith to think that way especially when you first start out. It also helps if other family members have experiences with buying stock. My grandpa bought dividend stocks, showed us how, and didn't lose his shirt.

  3. Dido Says:

    I'm sitting in on an investments & portfolios class this term. Last week, on one day that there was a major drop, the prof opened class by showing us what had happened to the DJIA that day (on Then he expanded the time frame of the graph, to one week, one year, and ten years--seeing it change like that really put the one day drop in proper perspective.

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