No more investing?

I was reading an article in this month's Atlantic (Why I Fired my Broker, Goldberg) and it brought up an interesting thought, which, admittedly, goes completely against my investing paradigm. However, now I'm wondering if it's time for a complete paradigm shift, given the current state of the economy and how we got here.

To date, my husband and I invest in the stock market, even if indirectly. We max out on our 401(k)s and we invest a monthly amount with our broker. We don't have too much debt, but should we even have any?

Over the past year, we've seen our 401(k)s plummet and our market investments drop. Granted, these are unrealized losses, but for how long will the market continue to drop?

Goldberg argues that only serious investors should invest in the stock market, rather than people using the market to build a future. In other words, only those people who can afford to lose everything they invest should invest. If you're saving for a child's college fund and can't afford to lose all that money, then you shouldn't invest in the stock market.

This goes against everything I believe in. Over the long run, the market evens out and you should expect about a 6-8% yearly return on average. But is this all different in this new environment? 

Goldberg also argues that brokers are bias in what stocks and industries they recommend, sometimes to the detriment of investors (as we've seen in th news lately). So if a broker is recommending a certain portfolio, is it really in my best interest? Aren't they tainted, to a certain degree, by their own agenda? Who can you really trust and where can you get that unbiased information?

Perhaps my husband and I should pull everything out and become debt free. Or, at the very least, stop investing in the market and use that money, instead, to pay off our debts. And then just save in a safer, albeit lower yield, investment. Of course, if I cash out now, I realize those losses, but if the market keeps tanking, isn't it better to cash out now while there's still something left?

Maybe the morale is that we all might need to do something a little different. Maybe investing in the markets is not the best way to go anymore. Is it time for a whole new change in thinking?

If you can't beat 'em, join 'em

With the recent state of the economy, this twitter was, er, tweeted:


Or you can by a share of Citigroup and have change left over for a small McDonald's coffee. I'm thankful that my husband and I have a steady jobs right now. If only I could just stomach the fast plummet of our savings and 401(k)s.

Maybe it's safer to invest in fries...if only I didn't give that up for Lent!

Holy Dow!

We live in interesting times, indeed.

I've always learned that you play the stock market for the long haul. That there will be ups and downs, but over a multi-year time horizon, the stocks do well and always trend upwards. Over these past few months, as I've watched our funds lose more and more money, I've had to repeat that mantra over and over: "We're in this for the long haul. We're in this for the long haul."

But the end doesn't yet seem in sight. Another "tumble" in the Dow this morning (I love how analysts use that word, like it's Humpty Dumpty sitting on some wall), falling more than 700 points before regaining 300 of those points.

I'm a little sketchy about the details of the bailout plan. One thing I want to ensure, though, is that government doesn't become too involved in our economy. Government involvement in healthcare, surely. Government involvement in the environment, possibly. Government involvement in the market, definitely not. Our markets to very well and the model is good. Of course, it seems like there are things that precipitated this fallout and maybe there needs to be more regulation of some sort, but we start to walk on some thin ice. I know it's unfounded, but I have these visions of our country becoming this communist state and everything that we once held dear and treasured are memories of the past.

A bit gloomy, I know. The strange thing is, no one I know has felt the effects of this economic downturn. We still go on living our lives as normal, driving to work, putting away money into investments. I'm in Kansas City on a project as I type. Nothing has really changed.

I can't decide if that's a good thing or not.