Why sell when the market is down? I was always told, "Buy low, sell high."

I won't even look at my account. I don't want to get sick/scared. I'll wait until it comes up and stays up a while. Then when I do look, maybe it will have reached where it was a year ago. :(
Leslie

I don't look.

Fidelity handles mine and sometimes it goes down a little but mostly stays nice and neat.

Now is the time to buy when the market is down. Bargains to be had out there.

During the last big hit, when the dot coms burst, etc., I raised the amount that I bought every week from my paycheck, bought all the way down and all the way back up. It served me very well. There's no reason not to buy on a regular weekly, monthly, or whatever schedule as long as you're in something you're not losing sleep over. What would be the point in selling stocks low and throwing the money at a low interest mortgage, when the stocks will probably outperform that % in a few years. I'm sure no expert, and just buy the standard stock index funds at Fidelity and Vanguard no matter what the market is doing. Holding your nose will probably help when pressing the submit button, lol. Linda

When I bought shares of a Canadian bank 41 years ago, I paid the stock price plus commission to the broker.

No money management company was involved in the years between, so no fees paid for management.

Were I to have sold last May - doubled about 4.5 times.

The dividend rate increased along with that rise in value of the stock, from about a nickel or a dime in the beginning to $3.48 per year currently.

They are involved in the U.S. sub-prime mortgage mess directly, plus it appears that they backed an insurance company that insured them and may now be in trouble.

Now the stock price has dropped by a third - doubled 4 times. If I sold now, I'd get the value of the sale, less commission.

Had I held that stock in a mutual fund, in the U.S. they'd have charged about 1.5% or more per year as their management expense ... plus, as they buy and sell stocks, which many do frequently, that's a cost of doing business, as well.

When I multiply the 1.5% by 41 years, I get about 60% of the value of the stock that would have been paid to the managment company, over those years.

As it is, I'm hoping that my bank stock goes up again, over the years, to recoup the reduction in value ...

... but if it had been held in a mutual fund, much of that money would have gone into someone else's pocket.

Plus ... in Canada, many mutual fund management companies charge 2.5% or more on equity-based funds, which are the main ones that I hold.

That rate of fee over the 40 years would have eaten a larger percentage of the value of the asset, over the long period.

Some mutual fund management companies manage to grow faster than the sector of the market into which they invest, about 10 - 15% of them.

About 85 - 90% of such managers do not.

It is my feeling that a number of investors could do better, as their skills increase, by buying individual stocks, paying for the stock and commission on purchase, and no management fee over the years.

Not only that, several of my equity-based mutual funds buy and sell assets in most years, and I get a report at the end of the year which I need to declare as income to the tax people - some of it taxed at a low rate, usually.

I am taxed on the dividends that I receive directly from the bank, at an advantageous rate.

That bank stock that I bought 41 years ago has not incurred any tax liability on capital in the intervening years.

If you're going to buy especially an equity-based mutual fund, you need to investigate it.

If you plan to buy a stock directly, you need to investigate it, as well.

Good wishes for increasingly skilled use of both your income and your assets.

ole joyful

The market has been up and down for years. If you can't stand the heat you need to get out of the kitchen. Over time stocks are the best investment. Most of my stocks were bought for the dividends. You just have to hang in there. It's only profit or loss if you sell.

I agree with vannie...the market is and always has been subject to any whim, it pinches when it is down but over all we have made lots of money in the stock market and we ride out the bad days and usually buy instead of selling....We are reworking our portfolio at the moment but the market has been good to us...If you are losing money, you should fire your broker...

I agree with all of you. Stocks are meant for the long run. I increased my savings at the first of the year when I felt we were going to go through some rough times. "Buy low, sell high" is absolutly true! I have an IRA that I just started to adjust down into a lower risk portfolio because I'm hoping to retire with 3 years. But my 403b savings I've raised the amount I'm saving, and that account is my higher risk account. I'm hoping not to touch that one for at least 6-8 years.

I agree with Ruthie, you should totally trust (and be involved) your investment broker. And when you have questions don't hestitate to call them!

Oh, I believe it depends upon your age and financial means to pay off your low interest mortgage. In most cases "don't".

~Susan

It's important to deal with a broker in whose skill and integrity you have a good deal of confidence.

But - don't forget - they are primarily sales people.

And they work for the brokerage firm, not you.

That said, it is important for them to keep you happy, as well, especially if you have major assets ... but sometimes they are assigned to sell products that their company has made a deal about, which may not be best for you.

ole joyful

Our financial advisor dropped by tonight for his annual visit. We are quite pleased with how things are going. The market does not scare us, as we're in for the long term.

I keep looking for deals. I sure do remember the dot com fiasco lindasewandsew. Amazon got down to $9 and change and I talked to DH about buying 100 shares. Didn't do it and now everytime I see that NASDAQ quote I kick myself in the fanny!! Anybody got any inside info, oops--I mean tips?

patti 47?? (who doesn't look a day over 36),

I've been called a "dope", at times.

Does that count?

Susan on,

What kind of stuff does your financial advisor sell?

Does s/he recommend financial investments that s/he doesn't sell?

As you are reasonably young, do you carry mainly equity-based assets? Mainly mutual funds, stocks, or what?

If you carry some mutual funds or stocks, have you considered having some of the certificates issued for ones that you plan to own for a numbr of years, your core assets, to use as collateral if you make a loan to buy a vehicle, etc? If you ask your credit union, bank or other lender, I'll bet that they'll offer a lower interest rate if you use such assets as collateral, in addition to the car.

Are you achieving major tax reductions on current investment income? Quite a bit of deferral of tax load?

Quite a few RRSPs? Have you read some of my materials referring to some of my reservations about using them, especially for younger investors?

If you carry substantial RRSP assets, is a portion of them of the self-directed kind, and, if so, and of substantial size, does your carrier manage them without an annual admin. fee? I enjoyed that for a number of years (got into such a plan under an earlier carrier that was bought out). But when rolling over the RRSP into a RRIF, the later carrier told me there'd be an annual fee.

When I returned a while later saying that I'd found some other carriers that would manage the fund with no fee ... they found a means by which they could do that, as well. I didn't feel it necessary to reveal to him that I found the offer made by the others less attractive. As Grandma used to say, "One should tell the truth ... but it isn't necesssary to shoot one's mouth off and tell all that one knows". (A bit of a free-style rendering of Grandma's words, here).

(My hope here is that you answer these questions within your own mind/family, not to me [it isn't my business, unless you choose to make it so], or here in public).

Good wishes, everyone, for increasing your knowledge of how money works, over the years.

ole joyful

P.S.: Commentary on RRSPs:
http://ths.gardenweb.com/forums/load/saving/msg011934521024.html?4

o j

P.P.S.: Investment portfolio 16 years:
5-year growth rates 16.58% - 36.61% (difference slightly over 20%);
10-year growth rates 19.67% - 29.37% (difference slightly under 10%):
http://ths.gardenweb.com/forums/load/finance/msg0206395613737.html?1

o j

Our financial planner/advisor works solely on commision. So, if the investments she makes for us make money, she makes money. She's makes a LOT of money, even with the downturn in the market . . . . :-)

There are bargains to be had out there. I'm a buy and hold investor and have a well balanced portfolio so fluctuations in the market don't bother me. I like some of the energy stocks, Canadian Oil Sands, etc. and I just bought a big chunk of a mining stock this AM - copper-nickel-precious metals. There's a start-up project here in northern MN; 4 billion tons in the known lode to be extracted over maybe the next 30 years. And at $3.50 a share, one can hardly lose.

Although I have a trusted broker who knows what I like, my confort levels and risk tolerances, I do my own research if something catches my attention. I get good tips from my brother, too, who seems to be a wizard at picking stocks. We've both done extremely well.

I feel that if your in it for the long haul and not close to retirement then you just buy more. I also have energy stocks and gold/silver/cobalt stocks also. I believe you have to be somewhat of a contrarian and if the stocks are going in the toilet then probably gold and energy are doing well. And because of those choices I have had some good gains on those. My husband has his 401K and he just keeps putting in his weekly amount, if the market goes down for the next 5 years it still doesn't matter because we are 15+ years from retirement and I figure we will have a great looking portfolio by then. You have to look at the big picture. My stepdaughter said to me the other day (she's 21) "I just don't see the point in saving my money, why not buy what you want now, you never know how long you will live" OY OY.. So I said.. well, if I felt that way, me and your dad can live with you when we retire right? Because we will have spent all of our money already and won't be able to afford to live on our own" LOL.. LOL...

drewsmaga,

Does your planner sell mutual funds?

Insurance?

If your mutual funds are doing better than the market as a whole (or their segment of it), you're doing better than most, for about 85 - 90% of mutual funds' managers don't. Many mutual fund investors pay approximately as much to the mutual fund management company as they do in income tax on those investments.

If only mutual funds, have you discussed the idea of buying individual stocks with her?

Can she sell stocks?

If you do some studying, then choose individual stocks carefully, you pay a commission on purchase and a commission on sale ...

... and there's no middle-person in between to get paid every year.

You may feel badly if some of your choices turn out basdly ... but don't cry too hard - actually your loss may be less than the mutual fund sales person was making in trailer fees (annual small compensation) over those years.

And if your stock price drops for a while, if it has quality, it will likely recover later, if you don't lose your nerve and sell.

If you have a number of equity-based mutual funds now, you have a good deal of diversification in place now.

Learning how money works is an interesting hobby, and it pays well. Check the biases of the people putting out the information, including planners - few are unbiased. And fewer stil lack a conflict of interest.

Good wishes for increasingly skilled investing.

ole joyful

JaneMarie5,

You didn't tell us the answer that your step-daughter gave you when you suggested that, having spent everything as you went, you'd move in with her on retirement.

I was waiting to hear what answer she made.

No such luck!

ole joyful