Brokerage investors,step forward please and help!!

[Hillbilly]

I got creamed on the NASDAQ,I had too much money in FDEGX. What to do.......Wheres a good place to put money at now?Bonds and a little Thrift is where I am currently parked.How long will it take the NASDAQ to get back to 5000?Years maybe? Or would blue chips be a good thing to get into?
Have we reached a bottom? I went under the advice to buy and hold,and I wish I had sold at 5000 (kinda rythmes huh?).
Seriously what would be a wise way to be invested,I thought I would be able to retire in 10 years,but since the bubble burst I will have to plan on another 5 years unless I can recoup somehow.

 

[TerryinMD]

Join the crowd. I too wished to retire in 10 years or less. But, alas and alec..../w3tcompact/icons/shocked.gif

Ouch, just looked up the symbol. I have my 401K in some significant losers also. Personally, I would sit tight. There is no sense in losing a lot of money unless you wish a tax write off. The market will eventually bounce back up. If you can, buy some more at the depressed prices. Be optimistic, it is the American way!!

Terry

 

[dmccarty]

Hillbilly,

I'm not a "brokerage investor", nor do I play one on TV, and I did not sleep in some hotel/motel that somehow turns me into a genius. /w3tcompact/icons/smile.gif Now that that disclamier is out....

My father is a semi-retired finance professor. So what I know I learned from him. For better or worse.
Course he is not rich and he certainly did not pass the "wealth" to me! /w3tcompact/icons/smile.gif But we talk about this kinda stuff from time to time.

What he has drilled into me is start EARLY when planning for retirement. Compounding is one heck of a tool. This does not sound like it applies to you but I put it on the table for others who are reading. After starting early, go with an index fund. Hopefully with very low overhead. Once one understands what compounding interest does, a .5, 1, or 1.5 % overhead between funds makes a HUGE difference long term.

There have been numerous studies and books about "stock pickers" and how well these guys actually do. The Wall Street Journal had an article in the last few months comparing funds with stock picker types vs random stock choices vs the index and the stock pickers just don't do as well over the years as a random pick or an index. I think there was a book on this, "Random Walk on Wall Street" or some such quite a few years ago. But there has been much written/studied about this subject.

There is a "rule" that went something like this. Take your age and subtract it from 100. That number you get is how much of your investments should be in stocks. So if you were 30. 70 percent of your investments should be in stock. The other 30% should be in a more stable investment like a house, land, bonds, etc. Course that is only a guide line depending on one's ability to take risk or not. And if one started saving for retirement later in life they might want to run riskier investments to drive up their number fast. Course they risk driving down their number fast as well.... /w3tcompact/icons/smile.gif

Vanguard has a very nice web site that is loaded with education materials. They will even mail stuff to you even if you are not an investor in one of their funds.

I know of people who were very near or past retirement age that got really burned when the stock market melted back in the late 80's or early 90's. They really should have moved their investments out of stocks since they could not afford to loose the money....

I'm not a big time investor. I just plug away putting money into my 401K accounts each paycheck. I'm not looking at making a 20% return every year. I'm just looking for a long term, decades long, return of 10-12%. Just what the market has down since the 30's.

I'm not sure this helps but try Vanguards web site or the http://www.fool.com.. The fool.com is the Motley Fool web site that has lots of educational material as well. I just went over there and they have an article on index funds.

Hope this helps...
Dan McCarty

 

[RichNJ]

I would not panic now. I'm sure that in the future you would kick yourself for selling now. If anything I would buy now - not that I have, but I'm leaning that way - for the long term.
And yes, Vanguard's web site is nice.
For an independent view of Vanguard look at www.adviseronline.com
They charge for the newsletter but if your are not a pro at investing (like me) the newsletter is good.

 

[snowman]

Depends on what you feel the stocks that FEDGX will do.

Various thoughts:

(a) If you think it's bottomed out and will more likely go up
than down between now and the end of the year, then
hold it until the end of the year and the sell it for any
tax loss (assuming it's not in a tax deferred account
like an IRA or something).

(b) If you think it will go down further or appreciate less
than a basic savings or brokerage account earning 3%,
then sell it now and keep it in cash making 3%.

(c) Don't get hung up on emotions - if you have a huge loss,
focus on the future potential, not what you loss. If you
paid $50,000 for it and its only worth $10,000 now, then
approach it as though you were investing $10,000 today
and what would you feel comfortable investing in.

(d) Establish your financial goals - ie: retirement - and how
much you think you will need from your investments.
There's nothing wrong with buying bonds and other
non-equity investment - they aren't as glamorous and
may not quintuple, but they'll (hopefully) never go to
zero either.

(e) If you invest in debt securities, I wouldn't lock up much
in long term bonds, as rates will probably go down/stay
down for at least another year. Buy a two year bond or
something and, when it matures in two years, hopefully
rates will be a little higher.

Don't always believe that you have to keep pace with the
guy driving the Mercedes; odds are likely that it's leased and
he's living on credit cards - I see it every day.

Good luck.

 

[RPM]

I think there's one consistent piece of advice that has stung people as being painfully true - Don't hold too much stock in your own company. It's always tempting to do this because it's the company you know most about ...

But, if you get fired or the company lays you off during a slump in the market then you will have been hit twice.

I'm a big fan of whole-market funds myself. There are very, very few people that have beaten the whole market indices over the last 10 or 20 years. I think that's the advice you'll read on the Vanguard web-site too.

Patrick

 

[Hillbilly]

Some little gal buy the name of Erin....?Managed this fdegx and it was winner then she resigned from Fidelity and opened up a "hedge fund ?"and a guy took over fdegx that was managing fidelity otc portfolio (focpx) and I read that his performance was spotty and he was way to heavy in the tech sector and fdegx went down the tube. This gal that resigned they said she could have been the next Peter Lynch that made the Magellan fund such a winner.
I put a little bit of money into brkb (Warren Buffets stock)I feel pretty safe there under Warrens investment choices.
Has anyone ever read about Mr. Buffet,truly an investing genius.

 

[Anonymous Poster]

I was smart, if you consider getting out of it all before the bubble burst (unfortunately WAY WAY before the bubble burst/w3tcompact/icons/frown.gif)

I feel comfortable that I knew that some of these idiot stocks like Yahoo were a joke, like people running around with fool's gold. What is it, a bunch of computer programming that can be duplicated by anyone, what is the value there? I know people that bought it, quadrupled (OR MORE) their money, STILL didn't sell it, then it tanked.

Out of curiousity, where are some/most of you buying equities, full service broker, one of the on-line places (scary to a virtual ignorant like myself). I'm thinking about getting back into it, at least I'd be buying at 1998 to 1990 levels! /w3tcompact/icons/smile.gif

del

 

[Hillbilly]

I deal through Fidelity brokerage services,I do not day trade!!!

 

[RPM]

Hillbilly - you may want to check BRKB's exposure through its insurance holdings.