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Raising The Debt Limit Crisis

Asset Allocation and THIS financial crisis  

10 members have voted

  1. 1. As a direct result of the debt crisis debate, how comfortable are you with your 403b investments?

    • Very comfortable, not changing a thing. In fact, this might be an opportunity to rebalance into equities if there is a crash!
    • Some what comfortable, I only wish I had a few more bonds and a few less in equities.
    • Little uncomfortable, I now realise that I took on too much risk. When this is over, I will lower my equity exposure, but not now.
    • PANIC! Already got out or am getting out ASAP.


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[url=http://meridianwealth.wordpress.com/2011/08/01/humor-break-dilbert-on-the-financial-crisis/][/url]Maybe some humor can provide the courage to response to the poll. Geeze, 97 lurkers and 4 participants. Looks like our election participation.

Lets laugh or cry about what we have been through the last 2 months: http://meridianwealth.wordpress.com/2011/08/01/humor-break-dilbert-on-the-financial-crisis/

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Whew! Aren't we all glad that our leaders in Washington are about to delay having to make any difficult decisions for 4 months? By Grabthar's hammer, what a surprise. (Probably only Alan Rickman could deliver that last sentence with the appropriate gravity of sarcsam).

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I voted for the first choice. Thanks to tony's advice at the beginning of this year, I moved money from emerging market into bond/tips, which then made it 25% of my portfolio. Now, as I am typing this, that money in bond/tips is beating all my other funds. I am thinking about moving half that money back into equities if there is at least another 10% drop in equities.

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Tips have been doing almost too well. Please be cautious moving big chunks of money to this category Now just because they are doing well. They are just one piece of the pie. Have a diversified portfolio. If you want to add tips do it by dollar cost averaging. In terms of equities don't time the market. Maintain your assett allocation. Every asset class has its ups and downs.

 

Don't let emotions get the best of you now.

 

These are interesting times aren't they!! Hang Tight.

 

 

Tony

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TIPs are doing well now because of the talk of inflation. But for a couple of years, their yields have been very low, so low, that we thought we would have to send money back to Vanguard!

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2 days after the crisis was averted and the market is crashing! NO human being can accurately predict the future.

Stay diversified, low costs, rebalance, know your risk tolerance with your age in fixed accounts and STAY THE COURSE.

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We gonna have another crash....Dow drop over 500 points today. Is it 2008 all over again?

 

Time to put money into market and buy low? Time to rebalanced portfolio by moving money into equities? Good time to put money into Roth IRA? What to do, what to do?

 

Do not panic people. Market goes down = chance to buy low. Take advantage of it. Be greedy when everyone is cautious.

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My 403b portfolio is taking a beating because its 70% equities and 70% of my contribution goes towards equities (using the 100 minus age = percentage in equities rule of thumb). My first instinct, like everyone, was to pull my hand out of the fire but I realize that's a bad move.

 

It sucked watching my contributions buy fewer and fewer shares every week as the market was going up and it sucks even more watching months of contributions evaporate in a matter of days. So its one of those screwed either way things. So I will make the most of a bad situation and put 100% of my contributions into equities now that the price is going down, even though I think they're probably still very overvalued and we're due for a big correction.

 

For my own stress levels, the best thing I can do is not watch TV or flip out over this. It's totally beyond my control. Stay calm, carry on.

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My 403b portfolio is taking a beating because its 70% equities and 70% of my contribution goes towards equities (using the 100 minus age = percentage in equities rule of thumb). My first instinct, like everyone, was to pull my hand out of the fire but I realize that's a bad move.

 

It sucked watching my contributions buy fewer and fewer shares every week as the market was going up and it sucks even more watching months of contributions evaporate in a matter of days. So its one of those screwed either way things. So I will make the most of a bad situation and put 100% of my contributions into equities now that the price is going down, even though I think they're probably still very overvalued and we're due for a big correction.

 

For my own stress levels, the best thing I can do is not watch TV or flip out over this. It's totally beyond my control. Stay calm, carry on.

 

 

You did the right move by not pulling money out. You did an even better move by changing your future contribution to 100% equities. So, I take it you are 30 years old. You have many years to go until retirement so I wouldn't stress out about this. I look at this situation as an opportunity. We are getting a chance to buy more shares then when the market was going up. It's all good.

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My 403b portfolio is taking a beating because its 70% equities and 70% of my contribution goes towards equities (using the 100 minus age = percentage in equities rule of thumb). My first instinct, like everyone, was to pull my hand out of the fire but I realize that's a bad move.

 

It sucked watching my contributions buy fewer and fewer shares every week as the market was going up and it sucks even more watching months of contributions evaporate in a matter of days. So its one of those screwed either way things. So I will make the most of a bad situation and put 100% of my contributions into equities now that the price is going down, even though I think they're probably still very overvalued and we're due for a big correction.

 

For my own stress levels, the best thing I can do is not watch TV or flip out over this. It's totally beyond my control. Stay calm, carry on.

 

 

You did the right move by not pulling money out. You did an even better move by changing your future contribution to 100% equities. So, I take it you are 30 years old. You have many years to go until retirement so I wouldn't stress out about this. I look at this situation as an opportunity. We are getting a chance to buy more shares then when the market was going up. It's all good.

 

 

Oidhat,

If you are 30 you want the market to crash and stay down!

You did the right thing.

Steve

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Bringing this back up because the futures for today's stock market opening look horrific again.

 

If you are young like "buck", you want to market to go down hard and stay down for years.

 

If you are retired or near retirement (over 50), your wits, emotions and your will to withstand this market will be tested.

If you took the time to have plan that you understand and if you are invested in the stock market with a fixed allocation that reflects your age and tolerance for risk, you know the risks. And if you did not know the risks, you will be given an opportunity to learn with risk means, perhaps now or perhaps in the future--thats a guarentee. The market gets very shaky every few years. 6 of you including myself are not making any changes to our asset allocation, except perhaps to rebalance.

 

Just some words of wisdom from an old goat who has lived through some horrific times such as the Cuban Missle crisis, the nuclear threat, Vietnam and the antiwar movement, a president resigning, oil embargo and gas lines, 3 or 4 wars in the middle east, tech bubble crash, 9/11 and the 2008 crash. But through it all, its not what the economy, politics, our neighors, or our family that affects us, its what WE DO to PREPARE with knowledge, skills with experience to have a plan that reflects you and stick with it.

 

If you are not sure if you can make it through, I strongly encourage you to contact one of the advisers advertized on this site. But you are hiring them to help your emotionally, as I am assuming that you already have a plan, but not sure of sticking with it. That's where a fiduciary adviser can help you.

Steve

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I voted the second answer....I'm nearly 58 and this roller coaster is making my stomach turn, but because of your sound advice I had been able to do the following before the latest "crash":

 

1. Rebalance all of my investments to be more in line with my age and retirement projections. Specifically I moved my Vanguard Growth fund into a target retirement fund, and my TIAA-Cref aggressive retirement fund into the moderate range. I also added a few more percentages in bond (TIPS...thanks Tony) into my direct Vanguard holdings.

 

2. I was able to transfer my previously expensive Nationwide 403b into TIAA-Cref, and lowered my expense ratios by about 2/3, so regardless of what the market does my investments won't be eaten away by hidden fees.

 

My point here is that since I was in the best portfolio for me at this stage of life, I'm staying the course...right where I'm supposed to be. (Where's the Pepto Bismol???)

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