Monday, May 18, 2009

Money and Investing

I don't talk a lot about money and investing here except to whine about all the money we are spending. One blog I read pretty religiously is RandomRoger. I don't understand everything he says much less agree with it all but he's obviously intelligent and trying to do a great job for his clients. He is also willing to discuss investing philosophy which I think is great. He believes in being more defensive than I do but that probably isn't a bad thing. Today I thought I'd talk a little about our portfolio.

First let me say that when my wife and I got married twenty-five years ago she had about $500 in savings and I had about $10,000. We didn't inherit anything. We both had good jobs though and were able to buy a house and save. Each of the three houses we have owned was modest. If either of us had lost our job, we could have scraped by on the one remaining salary. Most people in this country do the opposite and live in a house they can barely afford. I just don't agree with that philosophy.

I'm sitting here looking at a Quicken report showing the cost basis of our investments, the current value and the resultant gain or loss. There's a lot of red ink on the page! On the other hand, there are still some investments that are nicely in the black. Oddly, the stocks I have are doing better than the mutual funds. Some of these are simply because I bought the stock and have held it for years: Altria (Philip Morris tobacco) and Merck, the drug maker. Some are 'hot' even in this climate: Monsanto (genetically modifying seeds for farmers).

Of course there are losers. I've managed to lose a fourth of my investment in Intel (the pc chip maker). The financial stocks aren't doing well either but I have only HSBC (banking) and ING (insurance).

Among the other losers are stories I just don't understand. I have a gold miner and a precious metals fund - both are losers while gold is more than $900 an ounce. How can that happen? Gotta get rid of those lemons. I bought Siemens (electronics & telcom) and have lost almost half of my investment but I'm convinced it is a great company and will eventually repay my patience. I guess that's why I find the market fascinating; there are a million stories and it's my job to figure out which one to believe. BTW: we've got 74 individual investments. I'm doing some pruning here before long!

Hope this hasn't been too boring for you. Be careful, it's dangerous out there!


Croft said...

The Dow is up 235 today!

Lawyer Mom said...

I totally don't get why your gold and precious metals funds are down. Too weird. Still, anticipating inflation, I'd hold on to them -- that's just my woman's intuition (which, sadly, is often wrong). Sure glad you've got ING instead of AIG! Except, err, I guess we ALL own some AIG, by default.