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Archive for October, 2008

I-bonds vs. the stock market

October 12th, 2008 at 12:48 pm

Thought this might be a good time to post a link to this chart, being that the stock market has been so choppy lately. Note that the chart is updated to October 1st--and the I-bonds were already ahead before the worst of the stock market's descent. Might be good for anybody else who's feeling rather chicken right now.

http://www.savings-bond-advisor.com/i-bonds-versus-the-stock...

I've been thinking about these for a long time as part of our Emergency Fund, but never seem to have enough money to spare. They can't be bought in IRA's, where the bulk of our already-accumulated money is, so I'd have to find new money.

I know you can buy them in small amounts, but I guess I'm embarrassed to put a bank through the paperwork for a $50 bond. (I'd rather do the paper ones, as it would be a help to DH in an emergency.) But maybe I will start, once I know the new rate as of November 1. They are supposed to announce the new rate this week.

McDonald's-my best investment this week

October 8th, 2008 at 05:11 am

No, not McDonald's stock--coupons.

DMom and I sometimes go to McD's for coffee because it's cheaper than some places and we like it just as well. Yesterday there was a sign on the door about Halloween coupons books, so I asked about them.

For $1, you get a coupon folder with 12 coupons for free items. In other words, for $1 you get coupons for about $10 worth of food. Can't beat that with a stick.

I suppose they're meant for kids--they have Ronald McDonald on them, and they're for small items--hamburgers, cones, juice, milk, and apple dippers. They expire 12/31.

I bought two. They are just the kind of things DMom and I might want to snack on with our coffee. Or that would hold off the hunger pangs if I'm out on errands a long time.

Somehow this lifts my spirits more than hearing that the Fed has lowered interest rates. Wink

Asset allocation--any ideas?

October 5th, 2008 at 11:54 am

Hi, and hugs to everyone who left a comment for me last week.

SCFR mentioned how some older folks may be in trouble because they never changed their asset allocation as their situation changed:
http://scfr.savingadvice.com/2008/10/02/still-around_43742/

I think that hits the nail on the head for me, also. When we had two incomes, a higher total income, and cheaper health insurance, it wouldn't have been so painful to see the balance in my IRA drop over $800 in one day. I could have just saved harder for a couple of months and made up the loss. But the way things are right now, it could take me a year or more of scrimping to make it up, if it's possible to do at all.

Maybe it isn't just fear that makes me want to lessen my exposure to stocks, but good common sense. I've heard you shouldn't invest what you can't afford to lose--and right now I don't feel like we can afford to lose ANY of it.

Here's our asset allocation right now,
roughly:

Cash 46%
Bonds 36%
Stocks 17%

Only $6487 is easily accessible, i.e., cash and not in IRAs. Most of the bonds are non-IRA, but it's not like I can count on the values holding up if I needed to sell them. I have a GMAC thing that's lost 2/3 of its original value, although it's still paying me interest.

Honestly, I think I could sleep a lot better at night if I cashed it all in and just paid off our house!

Even if I sold the rest of the stock, it still wouldn't be accessible because it's all in my IRA. But at least I'd know for sure how much I had. I did sell my S&P 500 index fund last week, and I don't regret it. It only went down from where I sold it, and then I read that more S&P 500 companies cut their dividends in Sept. than ever before. That doesn't bode well.

Any thoughts?