**edited to fix the AFM link**
As a “Frugal” blogger I don’t talk much about finances. Well, that sounds silly 
I talk about finances on the “micro” level daily- saving and spending pennies and dollars. What I don’t really discuss is investing and wealth building. I see those issues as the “macro” or “strategic” part of personal finance-they are part of the whole picture and something that I do think about and attend to personally but just something that I don’t usually write about for several reasons:
#1, When I started this blog I decided to concentrate on frugality specifically to keep the blog focused.
#2, I don’t have a lot of nuts and bolts expertise in financial matters and would hate to lead anyone astray. There are plenty of other Personal Finance (PF) bloggers who write very detailed and informative sites that are already much better resources.
#3, Honestly that really isn’t my area of interest.
However I do read several PF blogs (you can see them in my blogroll). All Financial Matters is one of the best. His posts are varied-some are reviews, some are personal opinion, and there are very good, very detailed posts that break things down into the “math”. I must admit that frequently I skim the math part and trust him and just read the results. What can I say-someone slams up a couple of good looking charts and I’m likely to believe them *
Today he had an article up about the massive stock market dip yesterday. If you live under a rock-like that guy in the TV commercial-yesterday there was a 416-point drop in the Dow Jones Industrial Average. Everyone FREAKED. To put it mildly. AFM wrote an article putting the drop in perspective by comparing the percentage drop rather than the number of points drop (read the article and see the charts to see what I mean). There were several thoughtful comments from various readers, and I posted the following comment:
Uh, maybe I’m just too naive–but I’ve always looked at it like this: As long as I’m still holding on to my stocks/mutual funds etc, I haven’t actually lost or made any money until I’ve sold them. It’s all basically theoretical to me until that point. (sort of a financial Schrodinger cat)
So, maybe I’m a total idiot. But I’m 34, I don’t need to retire for over 20 years, and thinking that way makes it so I don’t freak when things like this happen. Maybe naivete is working in my favor?
Now, that comment actually sums up a lot of my philosophy about investing and I felt compelled to re post it here and add just a tad more. When it comes to investing Yankee Bill and I are in it for the long haul-no day trading for us! Our money is in there to grow, and while we want it in something semi-aggressive (because we have time to recover from market fluctuations) and we want to keep an eye out for anything we have that seems to be a consistent poor performer, otherwise we sort of go the slow and steady course.
Because of #3 mentioned above (I’m really not interested in learning the nuts and bolts of investing etc) we do use an AXA Advisor financial planner. Ours is the same one that several family members have used and been done well by-a reputable company. Could we possibly do the same thing for less money**-well, possibly. But since neither of us have the expertise or interest most likely we wouldn’t. We both have low or no load funds that we had purchased prior to this advisor that we still have kept, he has given us good advice on the options available to us through our military and state employment options.
So that’s sort of it in a nutshell!
*Note: Actually-I am usually skeptical of charts-I did take those mandatory stats classes both in my BA and Masters classes that showed you you could prove anything with statistics. But after reading AFM for a while I am willing to trust that he is not intentionally skewing the data. However I do not trust those little pie charts that they throw on the front page of most major newspapers. . . .
**We do not pay him any sort of salary. He is paid out of the “management fees” that come out of the investments. Standard stuff for financial ad visors.
{ 5 comments… read them below or add one }
The other way to look at a stock market drop, IMHO, would be to get excited and BUY!
Sounds good, anyway.
=D
What concerns me about the stock market drop really doesn’t have much to do with the stock market. It’s the overall atmosphere lately. I think this drop may be an indication of something else, mainly a lack of consumer confidance. That can cause more problems than anything else.
Good point Rebecca…I wonder how much Google has dropped. i could kick myself for not buying that stock when it was first offered!
I’m in it for the long haul, so I’m just riding it out.
Pat-true, on the other hand it sometimes feels like a tempest in a teakettle-everyone gets themselves totally spun up, there is a huge domino effect for a little bit, then it evens out.
Then again, as I said, I could just be naive
My FIL worked for a large brokerage firm for nearly 40 years. Although he mentioned the drop to my husband, he was not upset by it. He did very well with the stock market enabling he and my MIL to live financially worry-free these twenty years of retirement. His advice? Invest in “widows and orphans” stock and keep it for the long haul. Now if we were only able to do that over the years…..
Elise