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Investors: As If The Markets Haven’t Screwed You Enough…

So your stocks are down, what, 35%, and all you want to do is cling to the precious dollars you have left? Not so fast. Any money your stock funds made earlier in the year (when times were closer to peachy) is going to have to be taxed. Yea, I know you know that, but CNN wants to remind us that we can’t avoid paying taxes on stocks that have already lost the money they gained, and then some.

Unless your stocks are in a tax deferred account, like a 401(k) or IRA, you’ll probably have to pay taxes on them. “Fund managers had to sell appreciated shares to raise cash for redemptions, which triggered capital-gains distributions,” Tom Roseen, senior research analyst at Lipper told CNN. “So you have insult on top of injury.”

CNN suggests checking if your funds have declared their taxable distributions yet. If they haven’t, sell them and capture the loss. You can deduct up to $3,000 in capital losses from ordinary income. Losses beyond that amount can be carried forward indefinitely to offset future gains. The article provides other tips for investing wisely in the years ahead so taxes aren’t such a pain in the ass.

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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%

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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?

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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.