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Buying Stocks at "The Point of Maximum Pessimism"

Author is incorrect on several levels

ICE
UL Manager
Fri Sep 19, 2008 11:10 AM

Post Reply

Wow, where to begin? Not to stick it to the author, but if he would've made better career/investment choices, he'd be in sunny Florida instead of writing this column. Here's my issue with his comments:

"...some readers have been pulling their money out of stock funds and seeking the safety of the G fund and the F fund. That is a logical move. "

I don't agree Logical by whose standards?

"...those who moved money into the G fund a few months ago are undoubtedly richer than those that have left their money in the C, S and I funds..."

Want to bet? I began federal service in 87. Co-workers who have played it safe these past 20 years (G Fund) have about half of what I have today. While I have taken quite a hit in the past few years with the C,S and I Funds, I am nowhere near the 5.8 % return that the G Fund folks have realized.

Articles like this focus solely on the current bad news and dismiss the good times.

Compound interest is a wonderful thing. See me in 2 years...

Re: Author is incorrect on several levels

Engineer
DOD
Mon Sep 22, 2008 10:43 AM
Actually, I believe Ralph IS in sunny Florida enjoying his retirement while making a terrific second career out of providing those of us still on the federal employee treadmill with great information and the opportunity to marvel at vacuous comments like yours. You've totally missed the point of the article, which was to illustrate the resilience of the stock market, not to encourage the faint of heart to flee to the G and F funds.

Re: Author is incorrect on several levels

ICE
UL Manager
Mon Sep 22, 2008 1:39 PM
Well, I didn't mean to anger you, but there really is no need to defend the author...he's quite capable of that, I'm certain.

Far from being devoid of substance, as you suggested my comments were, they accurartely reflect the feelings of the other readers, if you take time to read vs. playing Defender of the Author.

We're all in the same leaky boat. While I value the articles and commentary from this site, we all choose whose advice to follow. In this instance, the author's comments were wrongheaded and I provided clear examples of that.

You really need to grow some (thicker skin) if you're going to play in this game. Put away the thesaurus and pick up Investing for Dummies.

And ease up there, skippy....

Let me shed some light on this

ICE
UL Manager
Fri Sep 19, 2008 11:34 AM

Post Reply

Like many TSP investors, you are looking solely at the $$ amount, not the share amount.

One never loses shares one purchases, those shares just fluctuate in price.

In May 2008, I owned 18,337 shares of C Fund stock; today I own 19, 021. In May, those shares were worth $15.70; today they are worth $13.80. In between, the price has reached $17. I am confident that they stock will go past $20.

Do the math.

I hope this helps disspell the fallacy of forever losing money when shares drop dramatically. If one continues to buy those shares, and those shares increase, wa-la...you're in the black.

Re: Let me shed some light on this

Fed Peasant
DOD
Mon Sep 22, 2008 3:14 PM
While you & your cohorts debate how many angels can dance on the head of a needle, the market tidal wave is drowning you. You guys should have a drink & loosen up!! Focus your energy, & intellect, on sound strategy in this danger zone!!

Re: Let me shed some light on this

UL Manager
ICE
Tue Sep 23, 2008 7:50 PM
I don't think the market tidal wave is drowning me. I really do have a deep faith in the USA. If the market collapses, how many shares I have in the S&P will be the VERY least of my worries. I will still *own* those shares. When the market rebounds, those shares will be worth quite a bit.


Having 5-12 years to think about retirement, I'm not worried at all. Now, I completely understand the retired folks--or those contemplating retirement--are concerned about their investments.

However, I'm not kidding when I say that you should buy Investing for Dummies and wait for the returns...

No one *loses* any money, unless one buys high and sells low. We still own shares, folks. I think that a sound money manager will instruct you to stop looking at the dollar amount and instead focus on the number of shares you own.


In the end, it's we who are responsible for the choices we make. Make informed choices.

Re: Let me shed some light on this

Civil Engineer
VHA
Wed Oct 1, 2008 12:28 PM
Your shares and share price analyis isn't bad - it's called dollar cost averaging. However if you can reasonably foresee that the market is in sad shape and will continue to be so for the next several months then you're ahead selling high and buying low later. I left the C, S, and I funds (ah the I fund gains last year!) in December 2007 for the G - my total $$ amount has gone up by $14K so far this year - not down. This gives me more $$ to buy cheap shares when I expect the market to recover. Not having to pick the bottom - just buy lower than I sold (which isn't hard when the C fund share price is in the $12 range!)

The Sky Is Falling!

Chicken Little
Dept of Falling Sky
Fri Sep 19, 2008 8:21 PM

Post Reply

The sky is falling!

Scratching your watch!

Retired Air Force
U.S. Navy
Sat Sep 20, 2008 3:04 AM

Post Reply

Well, what happened to the I fund yesterday? Glad I left my shares in the I fund and continued my contributions to the I fund. Cost averaging is painfull; but no matter what fund you invest in you can find some relief if you apply the practice of cost averaging. October 31 2007 I fund shares were at $26.31 now you and I can buy the same shares for $19.51. Something to think about.

Trends

Gov Worker
DoD
Sat Sep 20, 2008 8:59 AM

Post Reply

Trends do not agree with the article currently and the economy has yet to see the worst. Unemployment is getting pretty high, and the houses are still being foreclosed. The bailouts may be good for some and just a bump in the road for others. Even if I wanted to buy back in I can't because I already made 2 trades this month, how stupid!. That is ok, because my plan is to keep my money safe and play with new contributions. This has always worked for me. Markets are emotional, not rational, so I see more downside to come. I will chime in when I think it's time to risk my future bread and butter.

TSP

Diversity Manager
DOL
Mon Sep 22, 2008 4:07 PM

Post Reply

The Fed Gov needs to be able to take all the TSP funds it needs to bail out the private sector. Only Feds have a defined pension SS and TSP. It makes sense that we fund the shortfall. The private sector has been funding the gov't thru their SS assets since 1967 so its time ours are put at risk

Re: TSP

Health Physicist
DON
Mon Sep 22, 2008 5:37 PM
Have you lost your mind!

That's our money, not the governments. They have no right to it anymore than anyone else.

Re: TSP

Diversity Manager
DOL
Mon Sep 22, 2008 9:10 PM
Well they have taken my SS $$ so it only seems right that they tap TSP and CRS pension funds for ready cash

Re: TSP

Analyst
DOD
Tue Sep 23, 2008 9:56 AM
Diversity Manager DOL I hope you don't vote.

Re: TSP

worker
government
Fri Nov 21, 2008 10:17 AM
Perhaps diversity manager is nuts. The others have not funded us. We get paid a salary plus benefits. One benefit is the TSP. If you are FERS you get a match plus interest. If CERS you just get interest almost like a bank. My TSP is my money, not government money to spend as they see fit.
The government can spend my tax money.
As far as social security is concerned, its receipts will not meet its expenses by some year. This has nothing to do with them taking the money from you.

RE:TSP

Fed Worker
DOD
Tue Sep 23, 2008 5:58 AM

Post Reply

Diversity Manager wow! You sound like someone else I know at another site. I bet your title is made up. SS and TSP is no different from SS and 401K in most companies, and since we are with Barclay's we are at risk. You know that already, you just want to get these folks excited. Nice to see you DK.

Re: RE:TSP

Peon
VA
Tue Sep 23, 2008 12:52 PM
What's Barclay's??
Total Comments: 36
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