Do you still think the stock market is the safest place?

[SuzySunshine]

For now we're staying where we're at because we feel we're young enough to do so. The ones I worry about are my parents who are close to retirement. I'm not sure what they're going to do, I hope they'll go get some professional advice.

Re: Do you still think the stock market is the safest place?

I agree with Cheri. For long term, we are staying invested. Over the long haul, savings and investing will pay off (imo, specifically with trying to invest on a consistent basis or something along the lines of dollar cost averaging). I think it is a good idea to have $$ in other less risky places too. I don't know if I consider it the safest but maybe a better long-term choice. If you can stomach it, maybe wait for it to bounce back a little before selling (on second thought, listen to me because who knows what will happen in the next few months). Ours is not a completely worry-free household. Market fluctuations bother DH more than me.

[migirl]

Re: Do you still think the stock market is the safest place?

We're also staying put, we're young enough that we're comfortable riding out the turbulence.

Plus, depending on how your specific investments are doing right now, pulling your money out may mean selling while prices are low. :huh: I think as long as you're well-diversified and have a long-term perspective, the ride might be bumpy but you'll end up okay (using history as a guide, of course!).

[Vanquisher]

Re: Do you still think the stock market is the safest place?

I feel like such a child. Stocks, portfolios, what?

Carry on.

Re: Do you still think the stock market is the safest place?

Plus, depending on how your specific investments are doing right now, pulling your money out may mean selling while prices are low. :huh: I think as long as you're well-diversified and have a long-term perspective, the ride might be bumpy but you'll end up okay (using history as a guide, of course!).

That is what I was trying to say!

If you are looking at a 1 or 2 year timeframe, I can see how it would be too risky. I think that for retirement accounts (primarily where we have stock or fund holdings) it is a better choice. Just beating inflation makes it awfully hard to save enough for retirement.

[GrayMatterWife]

Re: Do you still think the stock market is the safest place?

I think I posted about a year ago asking if people still planned to stay the course with their investments or modify them. Most people were staying the course. I feel like we're in an economic circulatory collapse (and I spread the blame from bottom to top, it's pandemic), and that the gov is infusing vasopressors that might or might not maintain our vital signs. I know everyone says that the market is still the safest place to invest your money, but what does your gut say? I'm thinking about decreasing our percentage of stock investments for now.

The stock market is NEVER the safest placest to park you money, if by "safe" you mean "protected againt loss of base." By definition, it involves risk, and risk reduces "safety." It may, however, be the most appropriate investment vehicle for you, despite the risk exposure.

The very "safest" place to invest your money, I would venture, would be in US Treasury bonds adjusted for inflation. Other than what might result if the US Gov defaulted on its bond obligations, there is no risk--you principal will remain the same and be worth the same when you cash in the bond as it is worth today. Similarly, a CD is a guaranteed return on principal (although they are set at a specific % rate, which may or may not beat the rate of inflation). The problem is, though, that this also is way too conservative an investment vehicle for long-term investing. Most people don't become financially comfortable for retirement by simply saving really hard and not losing principal or having their money decline in real power. You would have to save at an extraordinarily high rate to ever be able to retire. Most people who retire comfortably (other than those who are either in a sweet pension deal or hit the lotto) do so through a combination of saving and investing in vehicles that expose the principal to stage-appropriate risk.

What time frame are you considering? Over the next ten to thirty years (ie, money you're putting away as a genuine long-term investment, like for retirement or child's marriage or something?)? Then, yeah, of course you stick it out in the market. WHERE in the market, I couldn't say--but diversity would serve you best unless you really know what you're doing. Talk with a financial advisor and do some research to find a 4- or 5-star type fund you'd be comfortable with.

If you are talking about money you will need to access in the short term, then keeping it in stocks may not be the best option, depending on how quickly you will need to be able to liquidate. And you will definitely feel (and worry about) the daily ups-and-downs more.

Re: Do you still think the stock market is the safest place?

I think that if it keeps you up at night, that is something to pay attention to. No sense in making yourself miserable. Maybe shorten your timeframe on sitting it out to 3 months and then re-evaluate. I'm seeing this as a chance to smooth out losses and am going to add a little more than usual to our kids college accounts but like you said, things could still go lower. Do you have a lot of fund choices? Some plans offer a range on more to less aggressive.

I posted and then deleted a link for the bonds that Abigail mentioned because I think they have a 5 year minimum. I'll put it back:
http://www.treasurydirect.gov/indiv/pro ... glance.htm

[Vishenka69]

Re: Do you still think the stock market is the safest place?

We have diversified our 401's to spread out the risk and we're staying put with those. Everything else has been socked away for a downpayment. I agree that solid stocks make a great sense to buy now, BUT only for those who can live with risk and are looking long term. I'm currently debating if I should jump on the sale or save for furniture. I'm not big on the mass hysteria, so I don't agree that it's the worse possible scenario and we should all run screaming and hide under the blankets until this downturn passes. Part of the downturn is the market adjusting itself and part of it is everything running in hysterics.

[ladymoreta]

Re: Do you still think the stock market is the safest place?

I don't have much as far as investments go, just a few thousand I put into my 401k over the past four years, so I'm more concerned about catching up on our retirement when my DH finishes residency than about losing what I have in there now. I check my balance every now and then, and one of the 401k's shows my personal rate of return is -10%, and one shows -20%. I think I probably just went with too many risky funds, but I think most of them were rated 4's and 5's. Oh well, with the small amount that I have, and with as many years as we have left, I'm not too worried, but I feel really bad for the people who are wanting to retire in the next 5-10 years. From what I've heard, this will be a kind of long recession. When we start investing seriously, we'll get an advisor to tell us what to do.

I still think that investing in the stock market is safe long-term. We're in a down-turn now, but I think recession is good for the economy. Lots of people and companies are paying off debt now, and with banks being so strict about their lending, it's more difficult to get into more debt. The banks and investments firms that are left afterwards will be better off because they'll have gotten some great discounts now. Our economy has been unhealthy for awhile, but we've had some band-aids that made it seem okay. Now that the band-aids are being ripped off, it'll sting for a little bit, but it's better in the long run.

Re: Do you still think the stock market is the safest place?

I have no money to put away But one of the brothers from the Motley Fool on NPR said all money in stocks should be kiss it and forget it money. You shouldn't have any money in stocks that you think that there is any possibility you may need to liquidate in 3 to 5 years. He gives tips on what to do for the average person. Here is the 3 min link to that interview:

Weekend Edition Sunday, September 21, 2008 · Investors are wondering how to respond to this week's news on Wall Street. Seth Jayson, senior analyst with "The Motley Fool," offers some tips for the everyday investor: "Stop worrying about it." Concentrate on the basics, buy the companies you understand when they get cheap and then don't worry about it over the next few days or weeks, Jayson tells Liane Hansen.

http://www.npr.org/templates/story/stor ... t=1&f=1003