Thursday, May 06, 2010

Market Day

Whew! What a day for the US stock market. Of course it is all over the news. I was sitting here looking to buy a stock and couldn't believe my eyes. I look once and it's $21.97 then $19.00 then $22.91 all in the space of 20 minutes or so. Amazing! Sure glad I don't work in that industry. It might be a great place to make a lot of money but trying to make sense of it all would make me crazy. I read RandomRoger's blog; he's an investment adviser down in Arizona and has a lot of interesting thoughts about the stock market. He associated the day with an old Tom Petty song "Puke Down".

And why did it all happen? The only reason I've heard is the rioting in Greece over some of the changes the government is trying to make to fix their national debt problem. Well, maybe. I sincerely wonder what the market would do if our own lawmakers ever got off the dime and made some of the changes we need! Suppose someone fired 10% of the federal government employees - just the dumbest ones - to help balance the budget. The market would probably drop 5,000 points.

When we first retired, my wife would have gone into hysterics on a day like today. She'd be sure we'd be eating dog food before the week would be out. Now, thankfully, she is calmer and sees the market for the roller coaster it is. Like Roger says: "We have been through them before and you will go through them again."

I've been trying to reposition our investments to broaden our diversification. It's pretty good now but based on a lot of mutual funds that were good when we first bought them but have since declined in quality. I'm very much a buy and hold kind of investor and that's ok but not if you just never revisit your holdings. Like the famous Fidelity Magellan mutual fund(FMAGX). It was a real superstar of a fund years ago; now it's merely a proxy for the market as a whole so why not have an index fund that does the same thing (intentionally!) and is cheaper to own?

We also hold some individual stocks. Some, like Chevron, we've had for a long time, we bought it in 1997. As a "big oil", we might have done better or worse but at least it does give us that representation in the area. It pays a fair dividend as well. Of course, we also had Thornburg Mortgage(TMA) which was one of our financial stocks. It was in the $30 a share range now it's worth a penny or two a share. Ya can't win 'em all.

Hope your day was good and your tomorrow will be better.

Beware of him who promises something for nothing. Bernard M. Baruch

3 comments:

詩婷 said...

一沙一世界,一花一天堂,掌中握無限,剎那即永恆..................................................

Dan said...

Nothing like a day or two of glitches in the stock market to make life interesting.

Croft said...

Well, it started coming back on Monday. I should get off the roller-coaster but it would be just as silly to bail from a rising market as it would be to bail from a falling one.....