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The stories of 5 people dealing with the financial crisis
http://www.sfgate.com/cgi-bin/articl...MNH0134BM2.DTL
Some interesting excerpts:
The smart one
The dumb one
once burned, twice shy?
Playing it safe?
Running scared but still believing the stock fairy tale
http://www.sfgate.com/cgi-bin/articl...MNH0134BM2.DTL
Some interesting excerpts:
The smart one
"A year ago, I got scared to death that the gang in the White House that brought us the Iraq war were also mismanaging the economy. I gave up on a diversified mix of stocks or funds in my account at TD Ameritrade and bought euros and gold through a trust structure at the brokerage," he says.
In so doing, he made a little money and preserved a college fund for his 16-year-old adopted daughter. But the Vietnam vet is not happy about it. "In effect, my money has fled my country, and I don't like having had to make such a decision," he says.
In so doing, he made a little money and preserved a college fund for his 16-year-old adopted daughter. But the Vietnam vet is not happy about it. "In effect, my money has fled my country, and I don't like having had to make such a decision," he says.
"I think I'm pretty diversified. That's the whole key. I'm 10 years from retirement. Long term, I think I'm OK. So I don't want to panic," she says.
Over the shorter term, Hillman is nervous because she has taken on more debt to upgrade her home's foundation and remodel two bathrooms.
In the middle of the project, "I went to draw on my home equity line of credit, and it was gone," she says. To get it reinstated, Hillman had to get a full appraisal on her house, something she didn't have to do when she established the line a few years ago.
Because she had enough home equity, her lender reinstated the line and reimbursed her for the appraisal fee. Rather than risk losing it again, she drew down the remainder of the credit line and stashed it in a money market fund.
Over the shorter term, Hillman is nervous because she has taken on more debt to upgrade her home's foundation and remodel two bathrooms.
In the middle of the project, "I went to draw on my home equity line of credit, and it was gone," she says. To get it reinstated, Hillman had to get a full appraisal on her house, something she didn't have to do when she established the line a few years ago.
Because she had enough home equity, her lender reinstated the line and reimbursed her for the appraisal fee. Rather than risk losing it again, she drew down the remainder of the credit line and stashed it in a money market fund.
This year Marc Itzkowitz of Palo Alto lost money in a short-term bond fund that was marketed as a higher yielding alternative to money market funds but lost value when its mortgage securities went bad. Once burned, Itzkowitz is shy about holding anything that says it's safe but is not guaranteed.
That's why, a couple of weeks ago, "I rolled cash out of money market funds into certificates of deposit," he says. "I think interest rates are going up so I laddered the CDs," mixing short-term ones for safety with longer-term ones for better yields. "My theory is you cannot trust the markets over a 3-year time horizon. If it's going to be shorter than three years, play it safe," he says.
That's why, a couple of weeks ago, "I rolled cash out of money market funds into certificates of deposit," he says. "I think interest rates are going up so I laddered the CDs," mixing short-term ones for safety with longer-term ones for better yields. "My theory is you cannot trust the markets over a 3-year time horizon. If it's going to be shorter than three years, play it safe," he says.
Pat Port of San Francisco hopes to retire in three years from her job as a regional environmental officer for the U.S. Department of the Interior. So back in July, "when things were looking ugly," Port moved most of the money in her federal Thrift Savings Plan from stock-index funds to the more stable government-securities fund.
"I left the monthly contributions distributed among three stock funds on the theory that as I buy shares, they should be cheap. When the market recovers, those shares will appreciate," she says.
"I left the monthly contributions distributed among three stock funds on the theory that as I buy shares, they should be cheap. When the market recovers, those shares will appreciate," she says.
"A long time ago, I split my investments into about half cash and half stocks. I'm one of those who believe cash is king. I'm a little more worried now that some of these banks are going to fail. I sure hope this FDIC stuff works."
His stock portfolio includes index funds and "a couple other funds that are supposed to be growth and income, but they all seem to be getting smaller and smaller," he says.
He "piddles around" with individual stocks. "About a month ago I bought Citigroup at $15 a share. It went to $19 in three days, and I sold it," he says.
"I was almost ready to buy some AIG. I'm an insurance guy. They're the biggest insurance company in the world," he says. But Meaney held back because he couldn't believe how fast the stock had dropped. "Look at them now. They're a penny stock."
Meany says he's "too scared" to touch any other financial stocks.
His stock portfolio includes index funds and "a couple other funds that are supposed to be growth and income, but they all seem to be getting smaller and smaller," he says.
He "piddles around" with individual stocks. "About a month ago I bought Citigroup at $15 a share. It went to $19 in three days, and I sold it," he says.
"I was almost ready to buy some AIG. I'm an insurance guy. They're the biggest insurance company in the world," he says. But Meaney held back because he couldn't believe how fast the stock had dropped. "Look at them now. They're a penny stock."
Meany says he's "too scared" to touch any other financial stocks.