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<It's now time to step up to the plate and PRESERVE what we have rather than worry about growth....Seriously considering taking all money from currently owned stocks and making investments in CD, Savings accts. until this daily plunge in stock prices abates.

DH has been retired for over 6 years, and we're only 57 years old. SS & Medicare are a long way off. We've allowed a Financial Consultant to handle our affairs since retirement, but his lack of doing ANYTHING has seen our portfolio drop 50% in the last 18 months. We simply can't go any lower....and also believe with conservative investments for the next few years ..ones we decide on, we can't do any worse.>

It seems like you have done some things backwards. One of my favorite posters "chipsboss" used to talk about his exercise of taking his portfolio and lopping 50% off of it. The purpose of the exercise is to ask yourself how that may impact your day to day life or if it will cause you to lose any sleep. If it does, you need to go back to the drawing board. The benefit is that you can deal from a position of strength rather than the position you are now in.

This is a very basic concept that any financial advisor should bring up and fully discuss in your very first session with him or her. If they don't, I would run like hell in the other direction.

I infer from your post that you were invested in mutual funds that did not match your risk profile at all. Why did you go along with that? Did you have at least an annual review with this person to see if you wanted or needed to make any changes? In addition to paying your consultant a fee each year, they may have received additional fees from the funds they placed you into. It is not enough to place all of your trust in someone else and then forget about it. You should always have a clear idea of what you own. The advisor should be able to explain in laymans terms why these investments are good for people in your circumstances. I would like to know how he convinced a new retiree to make very agressive investments.

Before one transitions from working to retirement, there should an extensive review of all of the implications. You should have a good idea of what your annual expenses are and what your monthly cash flow will be. You should also have 3-5 years worth of living expenses in a very liquid form (cash, MM, bonds, CD ladder, etc) so you do not get stuck in a situation you now have: selling out at the worst time.

I urge you to be cautious in looking at your intended "conservative" investments. Interest rates are at a 40 year low. You will not get much in CD rates now. Also if you buy bonds or a bond fund you should recognize that at some point interest rates will move back up. If they move up enough and you are again forced to sell at the wrong time, your safe investment can lose real money.

You may want to consider Vanguards GNMA fund (VFIIX) if you need additional current income. It too is not that far off it's 10 year high, but it tends to move within a tighter range depending on the interest rate environment. Over the last 10 years it has had two one year periods when it fell below 10.00. The range has been from a low of about 9.60 to a high of 10.60 and is now selling for around 10.50 now. Good luck!


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