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I Know Enough to Know What I Don't Know

October 6th, 2008 at 02:23 pm

No secret around these parts that I am a conservative investor, so this may surprise some, but right I am feeling some urges to put more money in to the stock market. (Bet you never thought you'd hear me say that, right?)

My great-grandfather did pretty well putting money in to the stock market following the crash of '29. There's a side of me that asks if he had the guts to do it, why don't I? You know the little voice, the one that says:

Oooh ... Dow's below 10,000 ... prices are down so much, so stocks must be a real bargain, right? Maybe ... maybe not. Bottom line is: I don't know. I am not a stock-picking genius. I am not my great-grandfather. I am comfortable with my current investments, and I am going to stick with them. We will continue putting money in to our IRAs (as much as we are allowed), and those new monies will continue going in to mutual funds that are a mix of stocks & bonds.

In keeping with my conservative nature and spurred by the current market drop, I have set a date when I will start gradually pulling money out of the stock market. But that doesn't involve making any changes right now.

We will continue house-bargain-hunting and nurturing my husband's business. We will continue living below our means and saving. Those are areas where we feel comfortable and confident. That's what I know.

But I am NOT going to buy individual stocks or invest in stock funds outside of our tax-deferred savings ... and I can live quite happily with the results, even if I miss out on the next bull run. I will not regret that I did not buy stock XYZ and double my money in 6 months. And just what is stock XYZ, the one that will double in 6 months??? I have no clue.

I may not know a lot, but I do know enough to know what I don't know.

5 Responses to “I Know Enough to Know What I Don't Know”

  1. gamecock43 Says:

    maybe it's our frugal natures. "What? That stocks half price?! Sign me up! Load me up now!" LOL.

  2. thriftorama Says:

    Buy low, sell high!

  3. baselle Says:

    Your investing has to make sense to you and has to fit your personality ... it means that you have to know a bit about investing and a lot about your personality. Your strategy makes sense to me.

  4. Broken Arrow Says:

    Baselle says it quite well here. It has to make sense to you, at a level you are comfortable with. From what I've read from your past, you are no slouch with your investing. So, I think you'll be just fine.

    In fact, I think you've hit the biggest point that I wish other people would realize. You said, "I don't know." Nothing wrong with that because, guess what? NOBODY DOES! Just because the Dow dropped through 10,000 doesn't mean it can't go lower.

    And yet, there are some out there that somehow insist they do, or at least think they've somehow got a Pretty Good Idea. I think it's those that do so (without having solid information to back up their assertions) that will ultimately hurt themselves.

    If I may just make one suggestion though, I don't know how far you are planning to go with leaving the stock market, but I hope that it won't be much. Selling in times like this is selling at a loss, and if you have quality mutual funds for example, and the money is long-term, I say it's worth hanging on.

    Of course, one does not have to pick stocks. I think people like that are kind of nutty to begin with. HEHE. But, there are all kinds of stock mutual funds (and even stocks) out there. Some are high quality and very conservative.

  5. scfr Says:

    gamecock: LOL! I'm just imaging the Saving Advice members rushing towards the flashing blue light where stocks are "on sale," asking if there are coupons available and if they can be doubled!

    thriftorama: And right now they are ... which one? Smile

    baselle & BA: Thanks. BA, no I'm not planning on pulling out of the stock market right now. Nothing rash. In fact, I'll actually be putting some in when we make our 2008 IRA contributions, but nothing outside of our tax-deferred savings. I sort of elaborated my thought process over on the forums in the "by what age do you hope to be out of the stock market" thread. Oh, and I know you know this, but you're not nutty! You just have a different way of investing which I completely respect. Hey ... if investing in stocks makes you nutty, then I'm a descendent of a nut (my great-grandfather).

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