Tag Archives: stock market

Recession? Depression? Either way, it sucks.

I know, I know, I know that investing is a long-term investment. Turning 25 next month, I’ve got plenty of time to recover. Still, watching the money I put in stocks over the last two years completely tank is a pain in the ass. I’ve lost about $5000 thus far out of maybe $23000 total invested. I can only imagine how painful this all must be to people who have even more money in investment accounts, esp if they’re closer to retirement.

Me… well, I’m trying really, REALLY hard to try to view this as an opportunity. The key word is actually trying. It’s hard. While my sharebuilder stocks are being hit the worst, my Vanguard funds aren’t doing much better. According to my Vanguard account…

So I’ve invested about $13,200 in my Roth IRA and non-IRA Vanguard accounts. The value of these accounts is $8966. Yikes!

Vanguard Losses: about $4000. -22% in this year alone.

I’m not pulling my investments out, however I realize that while this recessdepression isn’t going away anytime soon, my money just may be going, going, gone.

Sharebuilder is even scarier. Really scary.

How scary, you ask?

Well, what better to do at 2:30am than to make a chart of my total investments throughout the last year versus their current worth. I’ve been bad about tracking my Sharebuilder investments because i’d put a few hundred dollars into it per month as an experiment, hoping that it would make me some money, but not enough to completely destroy my life if the “experiment” failed. I’m still not sure if this experiment is a failure, since I plan to go long on all of these. I’m tempted to buy more of some of them now, or soon, but I’m also tempted to stay out of the stock market outside of my Roth IRA for the foreseeable future.

Of my total 9 investments in my Sharebuilder account, only one of them is currently “up.” That’d be my McDonalds stock. I paid $181.22 for what’s currently worth $190.

But that’s the only good news in an otherwise bleak account. Overall, the entire account is down 32%. Not surprisingly trending with the stock market, it’s gone from a 17% loss to a 32% loss in just two weeks. It was last “positive” in May, when it was up 2%. Since then, it’s just been sad to watch my stocks suffer.

Looking at the last two weeks, the hardest hit stocks & ETFs were PBD, EPI, and EWZ. I guess my other stocks had tanked deep already, while these were really hit by the lastest turmoil after surviving the earlier mess.

*EPI (india ETF)
of $372, I was down $62 two weeks ago. As of today, I’m down $130, or 35% of that investment.

*PBD (cleantech index)
of $356, I was down $70 two weeks ago and I’m down $167, or 47% of my initial investment today.

*EWZ (brazil ETF)
of $245, I was down $62 two weeks ago, and I’m now down $126, or 51% of my total investment.

SHAREBUILDER OVERALL
PERFORMANCE 2008

Total Investment: $2158
Current Value: $1465
————————-
Current Loss: -$694


March -2.2%
April -2.4%
May 1.2%
June -2.1%
July -5.8%
August -9%
Sept -21.6%
Oct -32%

Economic Ignorance… No Longer Bliss

I still can’t get over the fact that when capitalism fails, it must be recused with socialism. As my friend put it, it’s “socialism for the rich, capitalism for the poor.”

A long time ago I asked my dad if “The Great Depression” could happen again. He said no, that the government had a system in place now that would make it impossible. Well, now it seems that “system” is more like bailing out the banks when they’ve taken too much risk and screwed themselves over.

Listening to the news these days is scary. All the “financial crisis” this and “Next Great Depression” that. I don’t know how much of it to believe, but I admit, I’m scared. Scared because history doesn’t always repeat itself, and while the markets always tend to trend up over the long run, well, it’s still possible that the Great America could collapse. Isn’t it that we’ve borrowed trillions of dollars from China, a country that is fast taking over as a great superpower? How long can capitalism, American capitalism, withstand the weight of the world moving forward?

The other night, when I was listening to CNN around 4:30am, with the news going back and forth between the economic crisis and the Prime Minister of Iran speaking to the UN, the following thought popped into my mind:

What doesn’t kill you, makes you stronger. What makes you stronger, kills you.

Is America as we know it coming to an end? Or is everyone just way overreacting?

The Economy is in The Pooper

Driving home after I picked up lunch late this morning, I was listening to right-wing talk radio, which I do often these days, and the host was bitching about how we need to use our own resources for oil since our avoidance of this is causing lots of commercial establishments to go out of business.

Here’s the big news about 36 retail stores closing their doors…

“Information technology related companies that are closing stores include CompUSA going out of business, Sprint Nextel closing 125 locations, Movie Gallery closing 560 movie rental outlets, and bankrupt Sharper Image shutting down 90 to 180 stores.

Other retailers shutting down shops are: Ann Taylor, 117 stores; Eddie Bauer, 29 stores; Cache, 20 to 23 stores; Lane Bryant, 150 stores; Talbots, 100 stores; Gap, 85 stores; Foot Locker, 140 stores; Wickes going out of business; Levitz going out of business; Zales, 105 stores; Disney, 98 stores; Home Depot, 15 stores; Macy’s, 9 stores; Pep Boys, 33 stores; Ethan Allen, 12 stores; Wilsons, 158 stores; Pacific Sunwear, 228 stores; Bombay Company, 384 stores; KB Toys, 356 stores; and Dillards, six stores.” — http://www.theinquirer.net/gb/inquirer/news/2008/06/24/retailers-close-hundreds-stores


Yikes!!!

Guess those rebate checks didn’t work. Big surprise. I finally cashed mine. It’s going to pay off what I spent in Israel. Sorry Bushie.

The economy is really f’d up right now. I’m sure you’ve figured that out for yourself. I don’t know enough about economics to determine if this is a normal downswing in the cyclical pattern of the markets, or if we’re kind of screwed ala 1929.

What I do know is that my Sharebuilder and Vanguard accounts are suffering. I know now is really a good time to get in on investing because the economy is in the dumps, but it’s still hard to watch the little money I have turn into even less money!

I’ve been tracking my investment accounts separate from my liquid cash for about a year now. That includes all accounts my money lives where some risk of losing that money is involved, plus my CDs because I’m at some point going to move them into my Roth IRA or some other investment account.

The problem in really figuring out what the numbers mean is that I’ve added money to my investment account throughout the year, and while I could go back and calculate just how much I’ve added I really don’t have the time to figure that out. What’s more telling is my individual ETF and stock investments, and even more so my Vanguard funds where I pretty much know how much I’ve invested.

So a year ago on 6/21/2007 my total investment account was worth $21,014.57.
I liquidated about $5200 of a CD and moved that into my cash accounts, so that brought the account down to $22531.18 after it had increased to $27552.65 (not because it was performing well, but because i had been investing more aggresively than in the past and actually saving some money).

At the moment, my total investment account is worht $22,511, but I have some debt in my cash account because I spent like a mad woman on vacation. Luckily all should balance out next month when I’m paying just $550 for rent & storage in between moving and finding a new place to live.

So my investments are pretty much staying at the same base point. That’s mostly because the CDs and prosper account and monthly deposits have kept that stable. I’m sure I’ve actually lost more money in those accounts than what it looks like at first glance.

This is maybe more telling…

My Roth IRA account that I started, like, two years ago, was at $4019.73 on 6/21/07
I did not add or subtract any money from that specific acccount since then.
That account, the Vanguard Retirement 2050 account, is at $3759.84 at the moment.
I’m pretty sure I invested $4000 in that account, so it’s down, and it will likely keep going down as the economy flushes down the toliet.

Looking at my Sharebuilder funds, I can see that they’re all doing shitty. I was updating my spreadsheet a few times a week previously, but since I was gone for a month I had not updated it at all. I also did not invest anything more in that month.

Here is the value of each fund on 5/19 versus 6/15…

COMV: $56.48 / $52.24
EWZ: $308.16 / $273.94
KOL: $149.1 / $164.4
MCD: $206.55 / $196.1
PBD: $298.85 / $384.11 * ($100 was invested automatically in this account when I was gone)
GLD: $518.94 / $507.80
WFMI: $89.08 / $78.86
EPI: $183.74 / $144.81

As you can see, only my Coal ETF is making me any money. But it’s not enough to balance out all the other losses. I really don’t have a great deal of money invested in Sharebuilder because I’m starting small, it’s my Vanguard accounts that have the most of my money. And they are performing better, albeit not much better, than my individual ETF and stock picks.

I’m just going to leave the money in my sharebuilder account. I plan on investing slower, about $50 a month, in the clean energy ETF and the coal ETF, back and forth, because i figure either we’re going to get the energy we need from coal or cleantech, or both, but in the long run they’re probably pretty good bets. My Brazil and India funds are suffering, but if I ever get a raise I’d like to push more money into those while the economy is sucking. My coal ETF gives me enough exposure to Asia, though, as does my clean energy ETF. I’m a little confused as to Gold’s performance right now, as it had been going up before when the looming recession/depression was its own media gold, but now the ETF is kind of sitting there. I’m curious what will happen to it 20 or 30 years down the road. It just sucks that it’s going to be taxed as a collector’s item. I really need to get some of the gold ETF in my Roth so I don’t have to deal with that crappola.

Concerning My Expenses… and the Stock Market

I’ve charged about $500 in expenses for the show I’m currently working on, and while I’ll get all that money back, I’m now a little worried how I’m going to pay for all of it. I’ve moved so much of my money into stocks and such (which, of course, are performing awfully) that I have little in my checking account. I get paid sometime at the end of the month and I’m actually owed a lot of money right now for invoices I haven’t filed yet, so I’m not really concerned about the end result of my expenses balancing out, but for time being I have a credit card statement due that needs to be paid off, like, next week.

What to do, what to do.

In other financial news, I’m starting to really feel the hit of the stock market. Mostly I just picked a few bad stocks on the first day I signed up for Sharebuilder (bought 4 shares of one for $26 and now it’s down to a measly $11). I could sell that stock and buy something else with the money but it seems like a waste to sell $40 worth of stock with a $9 fee. If anything, it’s worth $30 to wait it out and see if one day that stock will go up again. Or if the company will go out of business and it will be worth nothing.

While that specific stock has cost me the most in my Sharebuilder account so far, I’m still down $73 dollars. Not so bad, I guess, compared to my Vanguard accounts which are now down hundreds. Thousands even. I can barely bare to look at them.

I’ve been keeping detailed track of my investments and every single account for the past month. I record it all in a google docs spreadsheet every three days. So this way I can see what my stocks are actually doing. It’s a little hard to track them because I invest in them every other week, so it’s hard to tell if they went up or if I just put more money into them.

I’m trying to continue investing with the “stocks are on sale now” mentality but it’s getting tough. Losing money is not my forte.

I’ll hang in there, though. Or at least I’ll try, in hopes that one day when the economy booms again, so will my stocks and index funds.

In the meantime, my GLD ETF is performing very well. I’m sad I didn’t buy more of it the first day I decided to start purchasing stocks. Still, I fear that I won’t get out of GLD at the right time and I’ll end up losing all my gains.

A few weeks ago I wrote how my GLD was up $29 and someone said that I should just sell it now, the $24 gain was good enough. But now it’s up $47 so I’m glad I didn’t sell. The way the economy is looking, it’s probably good to hold onto it for a while. It’s the only ETF/stock in my Sharebuilder account that’s actually making money. It helps balance the blows of everything else. Luckily it’s also the largest percentage of my Sharebuilder portfolio. So that’s why I’m only down $73. But given the trends in the stock market, I have a feeling I’ll be down much more.

The good news is that my Prosper accounts are doing well. I’m getting an average 8% return on them. I only have $200 in Prosper (and one $50 bid out) but it’s nice that my borrowers are paying me back on time thus far. It also feels like a nice cushion to the sagging stock market. But I know that one defaulted borrower would put me back $50, and more than one would make the whole P2P lending “benefits” worthless. Less than worthless. You know?

So where does that leave me? Like everyone else who is invested in anything, my finances are suffering right now. I feel like this is a great opportunity to throw money at the stock market (or at least at low-cost index funds and maybe some quality stocks now “on sale”) but gosh, it’s really hard to put money in knowing that I’m going to lose a lot in the meantime.

I mean my Vanguard total stock fund should have $5200 in it, but instead it has about $4500 or something. I can’t even check anymore. It’s too painful.

Sharebuilder – Will it Destroy Me?

I’m determined to “understand” the stock market as much as possible. Instead of “investing” in an economics class, I’m putting my hard-earned money into stocks via Sharebuilder.

It all started this week when I realized Sharebuilder and ING were now one in the same. I trust ING, so I figured it was time to make the next leap in my financial journey — ETFs and stocks. I wasn’t going to do anything crazy and spend $1000 on one stock right away, but it’s time to do some experimenting… especially since we’re in a recession and the markets are fairly weak right now. It can’t be that bad a time to buy, looking at a long-term investment.

I did a little research and with in my typical spontaneous and likely under thought fashion, I decided to quickly move on from my original $500 investment in Gold and one small cap company that I’ve liked since my reporting days (even though now that I think more about it, they’re probably not the greatest investment). Sharebuilder had a neat feature showing losses and gains that I couldn’t see unless I signed up for their monthly plan ($12 a month) which also features 6 free trades, so I gave in and spent the money. Probably a dumb idea. Potentially a very dumb idea.

But I’m young and it pays to be aggressive in my investments, supposedly. If my “safe” mutual funds are failing, then I know to expect that anything more aggressive will likely lose money too. I’m just hopeful 10-20 years down the line these purchases might pay off… maybe in time to move to a bigger place (or buy my first house) and have kids?

Regardless of how much you know or don’t know about the stock market, it really all is one big guessing game that can be sorted through with the help of statistics and a fine understanding of the economy. Still, another bomb could go off anywhere in the world and send everyone’s predictions completely out of whack. A part of me loves the excitement of the stock market. It’s a grown-up game where you can win some money (or lose all your money, eek.)

Again, I’m not being totally stupid about it. I still have a good $12k in two crappy-interest CDs (I’ll be moving those funds to one higher-interest CD as soon as they’re liquid again) and at least my gains on my CDs and occasional take-home pay equaling more than I spend in a given month have helped balance my loss of $700+ on my Vanguard accounts.

Besides, if we are in or going into a major recession, I believe (after reading a bit on the topic) that certain cheap retail establishments will do well, especially if they have foreign sales power. I’m all about the foreign investments too. Not all in one country, but I’m going to buy a small amount of an index fund in Brazil, one hot company in Spain, and another index tracker in China.

“Going to” is because I have to wait a week and a day before any of these investments post. That’s what Sharebuilder’s automatic investing is all about. I still don’t understand it completely. The “coolest” part about it (that seems to be its selling point compared to other online traders) is that you can purchase “fractional shares.” How they do this beats me, but basically you say “I want to invest $X into company Y the 1st Tuesday of every month” and if you have enough money in your account (which you can set up to automatically transfer from your bank account) it will invest exactly that much into that company on that Tuesday.

The good here is that if a stock costs $600 ala Google and you really want a piece of that action, I guess you could go and invest $30 in it. But what i don’t understand is how on earth Sharebuilder does that. Do they actually buy a full share of the stock assuming you will continue to buy the rest of it? They can’t really do that, because when they place your next order, you buy it at the market price for that Tuesday. As far as I know in my limited knowledge of stocks, you can’t just buy parts of a share. You have to take the whole thing. So how on earth does Sharebuilder do this? They don’t really explain how they do it on their site, they just say they can and basically that it’s an awesome feature for investors with a small amount of savings each month to invest. I like the idea, but please, someone explain this to me.

Anyway, I’ve set my account up to buy parts of six different stocks once a month for a total of $300. I figure I’m better off forgetting about $300 that I’ve made and investing it, and either it will make money (I am investing in a few large cap companies that seem to pay dividends, which looks to be a good thing to balance out my risk a bit) instead of looking in my bank account and spending more on food and clothing and such that I could get more cheaply. It will certainly force me to be more frugal, in a good way.

I just hate waiting for the investment window. What if Bush’s recession tax plan passes the day before my investment and all the sudden the stocks soar? I’m confident that the stock market is sucking right now, and I’ve picked stocks and ETFs that seem to have long term potential that are also sucking at the moment. I’m so nervous that it won’t be the case on Tuesday the 29th, when my bets should be posted.

Then supposedly I keep investing the same amount every month until I’ve built up a decent portfolio. I just can’t wait until I log into my Sharebuilder account and see a few different stocks and really start following them and understanding what they do and why. If anything, this will help me learn… for future reference… what kills a stock and what makes it soar. Hopefully I’ll learn more of the later.