Friday is the day that I always balance our household financial accounts and make sure bills are paid. Sitting here this morning, I decided to take a peek at our investment portfolio.
Or should I say, “not so good right now” portfolio.
Investing and saving at an early age is something I truly believe in. I’ve had a retirement account (403b) since I was 21, we’ve had a ROTH for 2 years, and my hubby just started his own 401k at work after we finally bit the procrastination bug and signed up him (sign up is only offered 4 times a year). Even Little Jack has a savings account started (with a 509 ESA waiting to be opened as soon as we get his SSN). Since we’re so young (me = 25, Kevin = almost 25) and are investing for the long term, we focus on high growth stock only with only a few percent of our portfolio focusing on conservative and moderate investments. And since we pretty much suck at picking individual stocks, we like mutual funds and target retirement funds. At this time, we only manage to save between $200 to $300 per month, but that should add up pretty well in the future.
We hope.
But right now, the stock market sucks, according to our portfolios.
Just in the past 7 months my 403b has lost over $1200! It’s really easy to tell the loss on that one because we’re no longer contributing it (it’s still at the job I was laid off from). That’s ONE with a capital THOUSAND I say. My stomach plummeted right along with the prices. I know in my head that over the next 10…20… 40 years, the prices will change and we should do well in the long run (stock market returns have averaged 10% over the past 70 years) - but I don’t live in the future. I live right now. And right now it’s hard to watch the stock market doing it’s wild little dance this year. Our ROTH isn’t doing well either, but at least we’re not losing anything…we’re just staying marginally at our net investment.
But I must say, my most disheartening investment came from the one time I decided to “go-it-alone” on Sharebuilder.com and purchase individual stocks. Last May, I decided (like the oh-so-smart financial wiz that I am), to buy into Ford, Vonage, and South Carolina Electric & Gas (our utility company).
Ford = a worldwide, well known, innovative 100+ year old company. Gotta love Henry Ford!
Vonage = a cutting edge company with an awesome commercial jingle (plus I’m a technogeek)
SCE&G = who wouldn’t want to own a utility company?! (anyone else play monopoly?)
Ok. So that was part of my financial genius game plan.
(Told you I sucked at picking individual stocks. That’s why I stick with funds).
Let’s just say in one year’s time, we lost 30% on those stocks. All 3 of them are down. Ford has been close to bankruptcy for some time now, and really deep in debt (a fact I didn’t realize until afterward). Vonage’s commercials stink now and broadband phones still aren’t mainstream. And even SCE&G’s stock has gone down nearly $10 from the price I bought at as the housing crises and higher consumer prices has begun to hurt South Carolina’s new building (and thus electrical) industry.
Great thinking, Lisa. Truly.
The worst was Vonage, which I paid a skyrocketing $3.26 for! I haven’t checked the 12 month high yet but I have a feeling that I bought it. Right now it’s at $1.76. A few months ago it had even plummeted down to less than a dollar!
I’m not selling though. Those 3 little stocks taught me a good lesson! And thank God our investment in them was minimal. Plus I have high (if only imaginitive) hopes for Ford. I like Ford. Really. Actually, I guess I just admire Henry Ford. But nonetheless, I don’t want to see them go bankrupt! So my fingers are crossed that maybe one day they’ll pull themselves up out of debt and the stock will shoot from $6 something to $40 something. (Now if only they’d stop dropping so much money sponsoring American Idol).
I wonder if Bush’s Economic Stimulus plan will help the US stock market any? The premise of the “free money” they federal government is giving away in May is so that people will spend it and stimulate the economy. I wonder if anyone will be investing it? Or if it’s all going to get dropped at Walmart or Exxon Mobile? I know we’re not going to be “spending” our money in a traditional sense. Ours will be used to finish paying off Kevin’s car loan (whoohoo!). Even if we didn’t plan on using it for the car, we still wouldn’t be “spending it” – we’d be putting it into savings. Not exactly what the government wants us to do. But oh well.
And now I must get back to the household accounts. Fun Fun.
Happy Friday!
