Sharon, you aren't being chicken little at all. The only reason I'm not jumping off a bridge is I put my entire 401k into money market funds two years ago. I have only about 40% of my stuff in stocks and bonds so I'm going to take an a$$ whupping but not as bad those who are fully invested. I'm sitting tight so far.

Depends on how long you have until you retire. My husband is not concerned because retirement for us is a couple decades away. The market will no doubt undergo many fluctuations between now and then. If you are planning to retire in the next 6 months to a year this could be a very large problem for you. Our retirement fund has gone up and down so much in the past month that it looks like a yoyo. Of course, if the stock market was to suddenly start booming our retirement could be much closer, but that is extremely unlikely!

For those retiring soon or thinking about it....start memorizing this phrase: "Would you like fries with that?".

Insensitive? Yes? True...possibly.

Duane

It's even worse if you already ARE retired. My 77 year old father is thinking about going back into business. He says then he has to only rely on himself, for better or worse.

My retirement is taking a huge hit, and I was conservatively invested. But it's so small in the first place, and my retirement is a ways off. I never thought of that money as "fail safe." Due to unemployment I'll probably have to take it out soon anyway.

Another who depends on her investments for income....that and social security.
I did some moving around a year ago....and am currently paying the resultant tax hit...on top of the huge dimunition fo my portfolio...
Spending as little money as I can to get by....
Luckily I don't owe anymore than current bills....but the value of my house is about 2/3 of what it was 3 or 4 years ago....
And the furnace is 16 years old and the refrigerator and cook top and ovens. Luckily I have a new roof and only 65K on my Honda...
But....I'm "very uneasy!"....and there's not a thing I can do....
Linda C

Not everyone Duane. Some folks paid as they went. The worst advise I ever got was it's not good to pay your house off early. When we bought ours we qualified for a huge loan. We used a fourth of that amount and payed it off in eleven years. For about the last 10 years there has been a house building boom here like I've never seen and will likely never see again. There are no 1500 sq ft houses being built and they were sold as fast as they were built. I couldn't figure out who all these rich folks were that were buying them. It finally dawned on me that it was my co-workers and other skilled craftsmen in other industries. That was why someone in a two story house, driving a brand new 4 wheel drive truck couldn't afford to play a round of golf when asked. And I don't think it is all their fault. The lending industry got completely out of hand when the original lender didn't take the hit when the loan was defaulted on. This whole situation has got me POd big time.

Sharon, if you weren't worried you would either be a fool, have a very rich uncle, have won the lottery or be dead already. I am 15 to 20 years (gulp) away form retiring and I am worried.

My heart is breaking for Dad. At 81 tomorrow, he is watching money just vaporize. But he knows also that we have have no big bills and can pay off everything each month. Having gone through WW2, we know how to economize and have been doing so very several years now. I was raised on the motto, "if you can't pay for it today, you sholdn't be buying it".

Jim, we think alike. Nuf' said or we will be in Hot Topic.

Things are very scary but there's very little we can do. Wish retirement was decades off! We are in semi- retirement and I think that's where we will have to stay for as long as we can hold out. And, yes, the banks have done everything they can to make credit spending seem what everyone does. There are millions of young people who will never get out from under. And millions of us older ones whose meager investments are being destroyed.

Hubby is retired, and we are taking a huge hit. Add to that the fact that I am still unemployed and finding a job in Michigan in no easy fete. We are very, very nervous.

Toss my hat in with everybody else.

Wachovia went down for the same reason WaMu couldn't hang on...a run. We've got to include increasing FDIC insurance to, at minimum $250K, so people feel safe with the banks. ($1M would be better)

We need a two-fold plan...one that protects the deposits & deals with the assets (loans). It's just like fighting a wildfire. We need to build a firewall well away from the flames and hold that line. Our leaders did a lousy job of explaining the problem to the public.

Yes, I'm worried also. You're not Chicken Little.

/tricia

No matter what the government does at this point we are in for a hit. A culture of corruption overtook our society in the USA and now the bills are due. Michigan has been going down for a couple decades. Expect lots of silly programs from the government that are mostly hot air. There will be prisons built on every street corner but no money to run them. Until you have lost your job it is hard to imagine how few decent jobs are out there. On Saturday nights the local bar fills with young people but more then half have been given money by their parents so they can enjoy a night out. Even some of the middle aged folks sit at the bar and count their money each time they buy a drink. More then a few want to talk to me about how to get a job at the factory. In a town of 350 men, women, and children one small white hiring sign on the front lawn draws a 1000 applications in three days! These are not high paying union jobs but hot, dirty, sweat jobs that pay enough to buy a used car and some beer on Saturday night.

For some years I've looked at my fridge and reminded myself that I have beer and food... times are good.

: (
lyra

This is very timely. My plan has been to retire in two years, nine months (23 days, fours hours, 16 minutes and 30 seconds -- no, I'm not anxious ;))

I think that plan has been flushed down the commode. All my saved and hard-earned money is disappearing. I am in a panic as to how I should be allocating my remaining funds. All I want to do is hang on to it. I've given up on growth.

Lyra, I do count my blessings in these hard times. I have a good job and it is pretty secure, although you never know. Hospitals are feeling the pinch, too, and people are in a wait and see mode regarding charitable gifts. I am especially grateful for very good health insurance.

I am extremely happy that I have no debt whatsoever.

Still, I am afraid to move ahead on some purchases I had planned. Thank heavens my HELOC is already in place, because it sounds like credit will be harder and harder to get. I will soon need a new (used) car and I hope to do some renovations to my house.

I have a good friend who lost her job two years ago and has not found another. The joy of job hunting when you are 60! She is going to get a free mammogram. Here she is, an educated, experienced worker and she is turning into a charity case.

Yes, I am scared, too, for me and for everyone else out there who had nothing to do with getting us into this mess.

It's been the same here as what JimTex said. There has been a building boom here since 1945 except for a short period of time when we had the recessions in the 1980's. I and my family have marveled at the mansions people were building and wondering how so many people could afford such expensive homes. No 1500 to 1800 sq ft homes here either. Now we know - it was houses they could ill afford, bought with money loaned to them by loan sharks who didn't care if they could pay it back or not.

Being a retired government worker I have a Thrift Savings Plan, not a 401K, but nearly the same thing and it has taken a huge hit. Politics totally aside, yes, I'm scared and don't trust Washington at all. They got us into this mess by not acting earlier and having some oversight.

Alright, this is just plain scary. Another day, another 200 point drop. At this week's burn rate in another month there won't be any Dow left!

We've stabilized everything except our 401(k) & there's just too little flexibility there to maneuver. What to do?? Misery loves company...anybody have any suggestions. We're about 4 years out from retirement. No debt except small mortgage that we could write a check for, if necessary, so no house worries...just that 401(k). It's been a nasty, nasty, week!

/tricia

My chicken rancher dad, 85, with nothing more than a high school education, has been in municipal bonds through all the booms and busts. He knows them well and has provided for his family and beyond. I really need to sit down and learn from him, he has tried to teach me, but my eyes glaze over after 'escrow to maturity'. He has a good bond broker here in LA if anyone wants the info.

Jessy, I bet he has done about the average return over lots of years without a lot of risk. I for one would like to what he has to say.

I'd love to know what your father has to say. Spend some time with him and give us an overview of what he has to say...PLEASE! I trust the older people much more than I trust...lol.

I sure do wish I had an elder I could go to. I had meeting with our financial advisor today. ACK! Some things are good some things are not so good.

For the first time in my life I heard my 87 year old father say he was worried about his kids and the futures. My dad never finished high school. He owned a plumbing company and did quite well. The only stock he ever owned was some pharmaceutical shares he bought for a dollar a share from a friend in the early 1960Âs. He bought 100 shares. After my mother passed away he wanted to get rid of them so I wouldnÂt have to deal with it later. He sold them for $92.42 a share. So now he tells everyone that he made a killing in the market. LOL After paying the capital gains he gave the rest to us kids so you could say he never made a penny.

Dads advice is keep it safe, slow and steady. They, my parents, always kept their money in CDÂs. In the 70Âs and 80Âs there money more than tripled due to the high interest rates. He owns commercial real estate that has given them a good income for over 35 years of retirement. He has always said never believe the government or anyone will give you anything. You have to work for it and make it yourself. Never trust anyone with your money always take care of it yourself. His parents lost everything in the depression and he is old enough to remember the bad times. The hungry times as he calls them.

It worries me that he is worried about us. I told him not to worry but I know he will. Even at 64 I am still his little girl. I called my sister and brother and told them not to tell him how much they have lost in their 401KÂs. This is all bad enough but I donÂt want my dad to worries about us. In reality he has set us up pretty well with trusts so I guess what really scares me is that he thinks he could lose it all.

Munies scare the beejeesums out of me right now. States, counties, & towns are all having budget issues & are unable to roll their paper due to the liquidity dry up. The general thinking is that as long as you hold a bond to maturity there's no market risk. But now, there is market risk. In the event of a municipal BK a bond holder would likely lose the entire investment. That's the reason today's yields are so high. They are reflecting the level of risk (high). Also, the tax benefits are defeated in a 401(k). For instance, I just checked & I can buy a CA state bond, due 1-15-10, for a YTM of 4.293. Sounds great but Moody's has the state of CA on a 'credit watch'.

Here's some other examples of how high the YTM are right now...

Clark County Nevada, 6-10-10, YTM 4.203
NYC, NY, 8-10-10, YTM 3.932
Bloomington, Minnesota, 2-1-11, YTM 4.400

When you consider that these are tax-exempt those are really high yields. So is the risk. :(

Am I missing something with these munies??

I want the yield but not the risk!

/tricia

I'll get back to you after Yom Kippur!

I'm a nervous wreck too. DH is too passive and that troubles me. My parents have done very well, but Dad isn't mentally where he used to be. When we had dinner there last night I tried to ask a few questions as he reads 4 newspapers a day and investment newsletters too. I didn't get much from him. There are definitely muni's in his portfolio, I'm calling his broker today!

Have you seen today's close? Are we collapsing?????

People are calling for the banks to be nationalized!

/tricia

This is so scary...... a lot of people are going to lose a lot of their income security.

Thankfully we have good pensions so the investments aren't quite as critical as it must be for people with no company pensions. Mind you who is to say the pensions will hold? After all most pensions funds are heavily invested....

The people most at risk right now are retired or soon to be retired folk...that is so sad.

On the other hand my son said, he doesn't have anything, so he isn't losing anything, and maybe this will bring housing etc to a level he can afford someday.....different perspective. He has time on his side so many others don't.

Where the h@ll is the Plunge Protection Team??

/t

At the spa with the AIG guys.......

Does any one have the date of the AIG spa trip? My old CEO is now heading up AIG- Ed Liddy- and I was wondering....

Dad is freaking out as the kids say, so I told him to pull out most the money and get some sleep. Take the tax hit, move to other investments. Some stocks may be worth "carpetbagging".

Thankfully my house is paid for, and I know how to make a penny scream. yeah, I am cheap or frugal. Don't get me wrong, I like my luxuries but I like to pay for them too and not on credit.

Are we collapsing? Maybe, but we sure are righting ourselves. Our greed has caught up to us. A three bedroom home for a million with no money down on an interest only loan? Please!

I will stop or I might go to Disney....

I cut/pasted Tricia's post to my guy. Here is his response:

'You can absolutely pass my name and email on to anyone who would be interested in bonds. At this point, all my new clients come from referrals and if it is good fit with good people I am happy to work with them.
Regarding the market in Municipals today, here are my thoughts:
The municipal market today is very diverse. There are many factors pushing prices and yields, and there are many bonds that do carry some risk.
The key (and the way IÂve ALWAYS handled every investment you) is to know the bond you are buying and what exactly is backing the issue. Many bonds you own have the principal and interest escrowed in U.S. Government obligations. If they donÂt have that backing I look into the revenue stream that is paying the bond, paying attention to tax or utility revenues, the history of payment, the amount coming in verses what is owed, and the diversification and size of the revenue base. We have always looked for value based more on safety than on yield. Even during the 1930Âs, the actual amount of total loss in Municipal bonds was about 1-3%. Like any other market there more aggressive bonds that are riskier, however they are avoidable.'

Any more questions? Would anyone like his name/email/# for further inquiries?