What to do

[Racerx]

What are people doing w/cash these days? Stocks, bonds, mutual funds, CDs or what? I Just started investing and almost crap my pants when the DOW takes a big hit. Like it's doing right now. I have some mutual funds but those aren't doing all to great right now either. They're good funds, three 5 star funds & two 4 star funds. All American funds.
I'm thinking 6 mo. cds and see what things look like July/August.
Any suggestions/remarks?
Thanx.
Racerx

[sweeps]

I have increased my monthly contributions to my stock plans. Rampant fear is a good buy signal.

[Caoineag]

Same ole same ole here. Main difference is that I am getting a few more shares for my money than I was getting before.

[Scanner]

I Just started investing and almost crap my pants when the DOW takes a big hit

Maybe you should re-assess your personal risk tolerance. No rule that says you have to be 100% equities. I knew a person who invested in insured muni bonds. That was it.

While we may "laugh" at such a conservative approach, the nice thing was when his wife got cancer in his early 50's he had access to hundreds of thousands of dollars in assets/income (tax-free). He had effectively saved for that "rainy" day. (I'm sure it was pouring to them)

If that money had been locked up in a Roth, SEP or 403(b), the gov't would have smacked his little paws for touching the money, even though at the time he needed it.

I do think his story illustrates we all get obsessed a bit with "tax shelters" which because of their time frame, encourage aggressive investing.

[disneysteve]

What are people doing w/cash these days?

Well, on Sunday, I donated several hundred cash to Caesars casino in Atlantic City. Of course, that wasn't my original intention, but that's how it turned out.

As for investing, I'm not really doing anything different. I'm continuing our dollar cost averaging, continuing to contribute to our Roth accounts, my wife continues her 401k contributions. We haven't really changed anything.

[Snave]

I agree with most of the posts on here. Now is the time to keep on plugging away. You are getting shares on the cheap. From your post you stated you are just starting to invest. Congrats. However, I can understand your fears. You may have put a couple thousand dollars into the market only to watch it drop by $500 seemingly overnight. It feels more like a gamble than a "wise" thing to do. But, it will go back up. There are a lot of very wealthy people out there and most of them did not earn the bulk of there money from CD's.

[Taribor]

I started buying more heavily into individual stocks. There are a lot of very, very good companies trading on a big discount right now, and every time the market beats them down, I buy a little more.


I understand the concern though; the whold "buy low sell high" routine sounds great until it is actually your REAL money going down, then panic and emotion kick in and the natural reaction is to run (sell). Stick to the fundamentals. I think those who continue as-is or buy in now, will be handsomely rewarded. Those who panic now will be kicking themselves a year and end up buying high and selling low.

[maat55]

Buy, buy, buy the roller coaster is heading up.

[aida2003]

I also increased our investments a little bit.

[disneysteve]

The people who are probably suffering are retirees or those close to retirement. My cousin is planning to retire in 2 years so he is not at all happy about current market conditions. He is still putting 25% of income into his 401k and just hoping the market recovers over the next few years. He probably won't actually be tapping the 401k right away anyway as he has other savings and a pension from his previous job so he has some time for things to recover even though he will be retired.

[Slug]

I increased my 401k contributions to max out earlier in the year.

I moved my cash holdings from ING to my credit union which is still giving me 3.91%.

I may make 2008 Roth contributions earlier in the year depending on bonus size (only 25 days away!)

[jIM_Ohio]

Do not let others tell you what your risk tolerance is.

I checked my IRA account balance for first time since Jan 1 this week. For first time in around 8 years, my contributions are less than my balance (a 60k rollover in late 2007 is the reason why).

I did nothing because of the drop in account balance, and am still sending $625 to the IRA each month right now. I opened a new account in PRPFX as well.

Staying the course and looking to invest more money.

[jrcase]

I am moving my idle cash from Online Savings to bond funds. Vanguard Short Term Investment Grade is a good bet.

[autoxer]

I Just started investing and almost crap my pants when the DOW takes a big hit. Like it's doing right now.

If you don't watch it so closely, then you won't have to worry so much...

My stock and mutual fund investments are in it for the long term, so let it drop and I'll buy shares at a discount. As for my short term investments, they are in a money market, so they didn't drop with the DOW. Separating my short term investments from my long term investments takes the emotion out of it, so I can continue the same strategy boom or bust.