I Don’t Lose My Shirt

Heh heh I wrote this early yesterday when things were looking up.  Then things started looking down.  Oh well, that’s how it goes sometimes.  But I still think (hope) things are going in the right direction.

Phew! It looks like the stock market is picking up.

Even though this is a “money” blog, I really never talk about specific money details.  It’s so personal. I’d honestly feel more comfortable talking about my underwear.  But not that comfortable, so don’t worry - I won’t.

But this turn of events makes me so happy, I’m going to open up a little.  In a very general sort of way.

I have been investing in the stock market (in a very small way) since the early days of my marriage.  I was helped along in this by a librarian where I used to work.  I was young and foolish.  He was older, and definitely wiser.

I used to sit in my cubicle, and just listen to him talk about investing in stocks to another librarian.  I thought it was interesting, but didn’t have anything to do with me.  I was young, just married, and at the bottom of the heap salary-wise.

But then I ventured out of my cubicle, and started asking him some questions.  He showed me that a good place to start was the Library’s 457(K) (the public institution’s version of the 401(K), basically the same thing) and that was the best place to start with investing in the stock market.  I didn’t really get it too much, but I did it. Because I sure did understand this: FREE MONEY!  The Library would match up to 4% of my contribution.  I think it’s just crazy to not take advantage of this.

Next, he pointed me in the direction of the National Association of Investors Corporation.  They are big on those investment clubs that were so popular in the early 90’s.  After the Beardstown Ladies went south, though, it seems like investment clubs did too. But the NAIC also catered to people like me who were interested in learning about the stock market on their own.

Wow, I really learned a lot from my membership.  The Internet wasn’t really as huge then as it is now, so I actually had to use a pencil, paper, and a calculator to figure things out.  I had to go into the library to look things up.

After all this I finally was ready to make my first two stock purchases.  I decided that Motorola and Aflac had good long-term growth prospects.  After all these years, I think I was right about Aflac, but Motorola has pretty much been one huge disappointment.  But that’s just how the cookie crumbles sometimes.

Pretty quickly, though, I came to realize that investing in the stocks of individual companies just wasn’t for me.  When I finally figured out what  mutual funds were all about, I knew I was on to something.  Then I found out about Index mutual funds, and I knew I was really on to something.

Index funds appeal to me because I am lazy and cheap.  Index funds are the cheapest things going in the stock market, plus they don’t really require much notice on my part.  I just put my contributions on auto-pilot, and there you have it. Index funds are cheap because the investing strategy is easy - mimic the S&P 500 (or whatever).  Also,  I’m not the one that has to allocate my modest monthly investment amongst all the different companies that make up an Index fund - the Big Brother computer does that.  Thanks, BBC.

But where to invest? Well, at first I really wanted to go with Vanguard.  I’d heard so many great things about them from my librarian friend.  But Vanguard required an initial $5,000 investment.  Oh, heck, I didn’t have that!

So I looked around and came across T. Rowe Price.  They had a great reputation, too.  And they only required an initial $2,500 investment.  That was pretty tough, too, but by scrimping and saving I managed to come up with it. And I bought my first fund.  I was a little nervous about investing all that money (very hard-earned), so after a great deal of thought I decided on a bond fund.

Now I can see that you can get into lots of these funds by agreeing to contribute an automatic $50 per month.  I don’t know if that was an option way back then because that would have been much easier. But I’m proud of myself for saving that initial $2,500, so it’s all good.

Over the years, little-by-little, I added five additional funds to my “portfolio” (oooo, that sounds so chi chi for someone like me!). I also kept investing monthly in Aflac, because it never disappointed me.  Motorola? - so long, sucker! I finally was able to get into Vanguard, too; I use them only for ROTH IRA’s, though.

So there were ups and downs, of course, but nothing like recent events.  Ouch! It was really scary.  But I’m in this for the long haul, plus I still have many many years until retirement.  So I just ignored the news, and kept doing my thing.

The last week or so has been a major relief.  Though I have taken a beating because of  market fluctuations, I haven’t lost a penny of the actual cash I’ve invested.  And I’m actually ahead a little bit because of income.  Of course, I reinvest all dividends.

Yay! I still have my shirt.  It’s a little worse for wear, but it’s hanging in there.  I hope this happy happy isn’t premature, but even if it is, I’m staying the course.  At the very least I’m picking up some cheap shares.  I like cheap.

P.S. I’m not recommending you do as I do, this is just a story of one girl’s investing life.  Hopefully this story will have a happy ending!