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What I'm Noticing and Thinking About These Days

October 24th, 2008 at 08:48 pm

1. On "Sensible Spending":

Went grocery shopping today. (For those of you following the HEB Banana Price Index, it is holding steady at 49-cents per lb.)

Midway through my trip I realized how much more comfortable my past couple grocery shopping trips have been. I had my list and coupons and pen, and I kept a running tally on my list of how many dollars worth of merchandise I had in my cart. Sometimes I paused to study the product and prices before deciding which item to buy. At one point I whipped out my little calculator before deciding on making a purchase.

What was comfortable about it? Not once did I get a funny look! I used to get funny looks from other shoppers quite often. Today no one looked at me sideways, and I noticed that I had a lot of compadres ... lots of people clutching lists & coupons. A nice older gentleman & I had a brief exchange over which package of frozen vegetables was a better deal with the in-store coupon. I saw something I rarely see ... people stopping and really looking and thinking before pulling something off the shelves, not just grabbing randomly. I saw one woman looking at the prices of soda with a VERY pained look on her face; I mean, I could almost see the internal struggle she was going through written all over her reddening, screwed-up face ... poor dear. I fought the urge to hug her and whisper "tap water ... it's better for you too" into her ear.

2. On "House Hunting":

We have about 80 houses on our watch list. Last weekend a very interesting thing happened ... On Monday, the status of 4 of them changed from "pending" to "sold." I found out the sales prices, and 2 sold for 97% of list, 1 for 99%, and 1 for 100%. Now, this does not necessarily tell the whole story ... for example, if the seller paid the buyer's closing costs, or threw in some appliances or a car or a vacation or whatever, then the sales price as percentage of list can appear inflated. And, please keep in mind that the houses that are likely to make it to our watch list are those that we consider to already be "bargain priced," so it's possible to percentage on our list that are selling is a bit higher than the percentage for the San Diego market in general. But still, it was interesting to see so many go to sold over one weekend (I had not been keeping track before this, but if my memory's correct there was maybe 1 going to sold every 2-3 weeks) and selling for so close to list.
Whether last weekend was a funny little blip or part of a trend remains to be seen. Very curious to see what will happen THIS weekend.

3. On "Investing & Risk Tolerance":

I've been thinking about this a lot the past few days ... You know those risk tolerance calculators that you can find on all of the mutual fund web sites (and other places)? Did they not work? Do they need to be re-calibrated? Or did people either just not bother to do them or not answer them honestly or without much self-awareness? Why do so many seem to be invested in things they very clearly did not have the risk tolerance for? The tools were right there for the taking, free of charge ... Did not enough individual investors not use them? Or did they not work as they should have? It's so baffling; am I missing something?

4. In Spite of the Craziness in the Stock Market, One Truth Remains: Numbers Don't Lie!

Yesterday my husband started talking about how he was thinking of moving his entire SEP-IRA to bonds - GASP! I knew I had to stay calm, so I just asked him why, and he started moaning about how much money he has "lost" (his word, not mine). I told him "you haven't lost money." And he said "how do you know?" I pulled out the good old-fashioned yellow sheet of lined paper from the front of his SEP-IRA file where I keep track of his annual contributions and I showed him how much he has contributed out-of-pocket and how much his balance is now, and whaddayaknow ... He hasn't lost money ... He has made money. Not a ton, but a bit. Up about 3-1/2% per year since he started contributing to his SEP (formerly a Keogh), tax year 2001, this in spite of the recent downturn. I think I've managed to talk him down from the ledge ... for now. I wonder how many other people have actually done better long-term than they think they have? They should look at the numbers ... they don't lie ... and they aren't emotional either.


3 Responses to “What I'm Noticing and Thinking About These Days”

  1. baselle Says:

    Regarding 3 - when stock prices are rising, risk is masked by opportunity & everybody loves risk, the more the better. They all say, 'yeah, yeah, yeah, I can take it when stocks go down no problem.' We just now have a whole crop of people who now know that a bear market has very long, sharp claws. Its an experience to remember.

  2. gamecock43 Says:

    Hey SCFR- How do you know that a house has been sold? I look on realtor.com but there is never any information of the action of a house. In addition- how do you find out what the final sales price was?? Thanks!

  3. scfr Says:

    gamecock43 - We are working with a realtor. We gave him our search parameters (areas, minimum sq ft, maximum price, etc) and he sends me new listings and changes to listings every day by Email. By going through his portal, I am able to keep a list of properties that look promising. (There is 1 list called "Favorites" and 1 called "Possibilities.") Each property shows the "Status" of the listing (Active, Pending, Sold, Expired, Cancelled).

    I wanted to start keeping track of what things were actually selling for, and my agent told me how to do that; it shows up on the listing once the status changes to "Sold." I assume that the seller's agent inputs it at the same time they sell a house, and I have access to that info through my agent's access.

    If you aren't working with an agent, you may be able to get sales price information, but it may take longer and be harder to get. It just depends on how much information is made available to the public where you live. And if a property is not actually sold but is just pulled off the market, you'd have no way of knowing that.

    Each area has it's own laws about how much info is available to the public.

    Back where I used to live, in the Seattle area, you could get sales price information from the King County Recorder's Office (you could search on their web site), but it took I think over a month for the information to be available. Here in Texas, the only way to get the information is through a realtor. (The realtors fight to keep laws on the books that restrict public access ... job security.) I'm not sure what is publicly available in San Diego, but since we decided to work with a realtor anyway, it's just much easier to access his information, so I haven't even tried to look up public info.

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