First time poster with long term objectives...I'm 27 years old and have participated in my employers' 401k from the first day I became eligible. I contribute the maximum 15% w/ 2% match into the 401, as well as max out my IRA accounts. I'm an employee of a bank and we have a subsidiary that offers mutual funds which are available to employees at NAV. Right now I have three Putnam IRA's and I just started an Oppenhiemer account (taxable account). All of my investments are in aggressive growth equities as I have thirty to thirty five years to let it sit. My question is this... Should I re-allocate before the year 2000 computer glitch becomes a factor? I've thought about it long and hard, and the only conclusion I can come to, as a mutual fund investor, is that Y2K can, at best, have a zero affect on equity markets with a probable negative affect on equity marktes which can't possibly be predicted... HELP!!!!!!MoMoney...
Given your long term horizon - forget about Y2K. Even if it has a major effect, it will be short term and your investments will easily have recovered by the time you tap them.Of course, if you want to play short term, I'm sure that there are plenty of people with MF's/stock picks/newsletters etc... designed to capitalize on Y2K, I saw on CNBC last night someone hocking a Y2K Mutual Fund, they said they would buy companies that would benefit and short companies that weren't going to be prepared.Personally - I'm not thinking about Y2K at all, I'm 26, Y2K will be ancient history by the time I'm ready to tap into any of my investments.
Maybe you're right... Even if my portfolio dropped by 50%, I'm not touchin' that money until I need a nurse to help me bath anyway, so what's the difference;^).BTW, I heard a rumor, and I'm almost afraid to ask it, but here goes.... I friend of mine told me that there will be computer glitshes when the DOW hits 10,000. True/False, and what affect could it possibly have on stock values???Thanks,MoMoney
The rumor (which AFAIK hasn't been substantiated) is that computerized trading programs will think the DJIA went to 0000 (instead of 10000) and thus issue sell signals.This isn't a concern. First, as soon as the Dow drops due to program trading, it will be 9900+ and the programs will issue buy signals again :) Second, as soon as the folks at the NYSE realize this, they will simply suspend program trading until it is fixed. A bit offtopic... in a sense I am glad Y2K has recieved attention, since it is a concern, but IMHO the press has gone into panic mode with it. Computers aren't going to magically stop working at 12:01am, and even if they did computers are notoriously stupid; simply tell them it is another year and they will be happy.
Telling a 'puter it's a different year is the whole problem... They will produce garbade data and corrupt other machines, both within and outside the company, with this garbage data. I'm not concerned with the 'puters of the world shutting down, just the finished product... Like I said before, I work for a bank, and we are getting totally blasted with warnings to be compliant. The funny thing is (not really) that the gub-ment is the ones mandating all this BS, and they won't even be close at the stroke of midnight on 12/31/99.MoMoney
>Of course, if you want to play short term, I'm sure >that there are plenty of people with MF's/stock> picks/newsletters etc... designed to capitalize on >Y2K, I saw on CNBC last night someone hocking> a Y2K Mutual Fund, they said they would buy companies >that would benefit and short companies> that weren't going to be prepared. Slight problem with this approach: How do you short "US Government"? That's where the worst of the Y2K problem will come to roost.
>I work for a bank, and we are getting totally blasted >with warnings to be compliant. The> funny thing is (not really) that the gub-ment is the >ones mandating all this BS, and they won't even be> close at the stroke of midnight on 12/31/99. It's an awful lot easier to decree than do. Anyway, as a bank you can be sued if your system messes up. Whose going to be able to sue the government?
I am going to be a lone wolf crying out in the woods with my reply.The year 2000 will be here no matter how prepared or not prepared the computers are, so I take the position of an old statement my father always said to me "if it happens to you, you are responsible to make sure it comes out correctly". In other words you must make sure that you have everything in order to protect yourself.I recommend keeping copies of all your investment reports, including getting a copy in mid to late December, 1999. This way you have proof what you had in your portfolio. As long as you have that, you will be OK. As a safety net I recommend that you keep a few months cash on hand (not in a checking account) for emergencies.That is the plan for me, and I am comfortable that what ever happens (if anything) will be corrected w/in a few months.Undoubtly there will be some problems, but I think that the major instatutions will have the major systems corrected because of the large liability for causing harm.In addition, all the big companies have to do is lie to the computer about the date and the problems go away.Personally, I am not going to worry until something happens. I am as prepared as I can be so what more can I do.LOL TTFN...TiggerToo
<<As long as you have that, you will be OK. As a safety net I recommend that you keep a few months cash on hand (not in a checking account) for emergencies.>>Do you mean keep a jar full of bills in your house?
that sure is what is sounds like.Personally, I would recommend massive jars and jugs of loose change, since as we've seen - nobody would steal it - they've all got too much at home themselves. And a few months living expenses in dimes and nickles would certainly hurt any thief's back on his way out, so you'd feel like you got him back.
TiggerToo wrote:In addition, all the big companies have to do is lie to the computer about the date and the problems go away.It's not that simple. This may work on your PC at home, but it's not at all a viable solution for most businesses.In the first place, you'll have a system failure before you even know you have a problem and need to readjust your system date. This could mean valuable and possibbly irretrievable data loss.And even if merely 'lying' about the date keeps one piece of software running on one computer, this is likely break many other programs. What does this do to network synchronization? And finally, the date and time is often a critical segment of your data. If you lie about the date, yes your software doesn't crash, but your data is now worthless. What happens in February 2000 when you ask for regional sales data for the last 6 months? You won't be happy with the results.
<>Hmmm. Bad answer, Mo. The amount of the drop is irrelevant. The time of the recovery is the key. If the port drops 50% today and comes up 100% tomorrow, you're still even. If it drops 5% today and takes 25 years to recover, you've got a major problem, even at your age. Yes, these are both extreme cases but they are meant to illustrate a point.We just ran through this conversation on the Y2K board. I've never been a market timer, a bear, or a doomday soothsayer. However, a simple strategy of moving to a money market fund is not unreasonable. By 1/1/2000, you'll know exactly how bad the problem is. Not many problems come with a clearer date than this one. If the market drops, that's a great buying opportunity with spectacular upside possibilites. If the market is unaffected, ask youself how much you might lose by sitting out a year.Right now there seems to be a good bit of denial about the effect that the depression in Indonesia and other parts of Asia, coupled with Japan's recently declared recession, will have in dragging down U.S. corporate earnings by the end of 1998. In 1999, even without a Y2K problem, I'd be very suprised to see the 30% market return that we averaged from 1995 to 1997. I doubt that you'll really sacrifice too much by being out of the market during some or all of 1999.Since the U.S. economy is impacted by global events, even if all possible Y2K problems are solved here before 1/1/2000, the Asian, European, and Latin American countries must also be in compliance. Imagine what would happen if Y2K caused a recession in Europe (a chain reaction from the interlinking of their economies).I don't believe that we are headed for a global economic meltdown. I do think that proper risk management will provide, at best, a rare bargain buying opportunity and, at worst, a slightly below-average return for a single year. For true long-term investors, the risk/reward equation for Y2K is very clear. Many people, unfortunately, are confusing the validly refutable arguement of market timing against long-term investment objectives with the certainty of a calendar date that allows for conscientious planning.
>In addition, all the big companies have to do is lie >to the computer about the date and the problems> go away. HUH??? You obviously don't understand the Y2K problem! The problem is that the computer will make bad decisions about date-related things because it reads 2000 as 1900. Lying to it about the date would *NOT* fix the problem, merely change it.
>If you lie about the date, yes your> software doesn't crash, but your data is now >worthless. What happens in February 2000 when you> ask for regional sales data for the last 6 months? >You won't be happy with the results. Or what happens when you try to send in your 2000 payroll report when you've set your clock back to 1999? Or what happens when it tries to print Jan 2000 checks when set to Jan 1999 and decides they have alredy been paid, so it sends out no money?
>>>Do you mean keep a jar full of bills in your house?<<<Yes, I figure that I can keep 3 months of cash on hand as a leverage against y2k. While I will lose some interest, I think that is the best defense against the y2k problem and for me the cheapist way to feel comfortable.TTFN...TiggerToo
>>>HUH??? You obviously don't understand the Y2K problem! The problem is that the computer will make bad decisions about date-related things because it reads 2000 as 1900. Lying to it about the date would *NOT* fix the problem, merely change it.<<<Actually I do understand the problem, and all I wanted to say is that it will happen if it is going to happen, and keep cash on hand to get through it. also I was trying to show a way to keep the computers running until they do fix the problems. I was in charge of getting all our software updated for the year 2000, and we have succeded.We tested it a few months ago by changing the date to 12/25/99, and waited a week. We had problems, but we changed the date, made some changes, and after a few false starts, we made it run.TTFN...TiggerToo
>Actually I do understand the problem, and all I wanted >to say is that it will happen if it is going to> happen, and keep cash on hand to get through it. also >I was trying to show a way to keep the> computers running until they do fix the problems. I >was in charge of getting all our software updated> for the year 2000, and we have succeded. For systems that don't make critical decisions based on the clock, you could get away with this. But the biggies are going to be financial systems. I wonder if the Jan & Feb 2000 social security checks are going to show up on schedule.
This is my first post here on this BB, but since I work in the Y2K business I thought I'd throw my 2 cents worth in here. There actually is a remediation technology that works by subtracting 28 years from all the dates as they enter the program and adding the 28 years back as data is written to files/databases/screens (days of the week, most holidays, etc. repeat every 28 years). There are some problems associated with this technique such as the problem of being to reliably find all the dates as they enter your program, but I understand that this technology is in use in some installations.I don't necessarily recommend this approach but I can see how 'lying to the computer' in this manner can be a workable solution for some users. daveps. BTW, I'll bet that programmers who deal with this get really good at adding and subtracting 28.
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