Tuesday, January 22, 2008

Economizing

"The main thing to worry about during a recession is losing your job and not being able to find another one. Stay on good terms with your parents. You never know when you might have to move back in with them."
That's a quote from this thread on Jezebel.com. It made me a bit sick to my stomach because I value my independence more than anything. Frankly, I would live in the ghetto with seven roommates before I ever moved back in with my parents.

All this recession talk has me a little jittery; as a young'un, I could fall prey to the "first hired, first fired" thing. However - and this is a big however - I work in an industry that happens to be booming, and my specific job skills are in high demand. My agency's taken on several high-value, high-profile clients lately. We're riding high, and if anything, my agency could never afford to lay me off.

Still, I think my savings binge has come just at the right time. Saving money is never a bad thing, and that goes doubly when there's a recession over the horizon. So, it means I may have to curtail my spending a little bit. Big deal - I should do that anyway. (And indeed I have been.)

My IRA has already lost money. As a new investor, I play the "login to my account every night and check out my running total" game, and after sinking by a couple dollars a day, it had lost $50 yesterday. Today, I can't get my total because of "system updates." I know that I haven't actually lost money until I pull money out of the fund, and the whole idea of an IRA is that it's kept long enough to ride out natural fluctuations. Still, I wonder if I invested at the absolute worst time. And should I wait for stock prices to fall before I invest a bit more money? Or should I forget it and simply get my savings account as fat as possible? Should I look more closely at what I'm investing in?

My thoughts don't really come from a place of dread or worry. They mostly come from a place of curiosity. It's been drilled into me that the choices we make determine our quality of life, and that's true. But external factors come into play, too.

2 comments:

drwende said...

If your IRA has you choose among different styles of funds, you wouldn't be hurt by learning the basics of what those fund types mean, how they typically perform throughout an economic cycle, and what mix is ordinarily considered appropriate at different phases in an investor's life. You want to make a choice that's basically sound for where you are now -- which doesn't prevent you from losing money, but does reduce your chances of being hit by something really wacky and preventable.

Forever Chic said...

I have the Balanced Strategy fund at USAA, which their system recommended for me after I filled out their questionnaire (which asked me about my age, debt, earnings, goals for my investments, etc.). It's 50% stocks, 50% bonds. I think it's a good fund for me - I'm just second-guessing myself and wondering if I should invest other money in foreign markets or something.

USAA has lots of different funds, and I can talk to their financial advisers for free. So I may do that, just to sate my curiosity.