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The year 2009 comes to a close with our financial picture being .. surprisingly on track. Strangely back in 2003 I made a projection of where our assets would be over the next twenty years, and in the end of the year 2009 it matches within a few hundred dollars what was expected at the start of the prediction. This seems impossible, but it is true. Fortunately, the future predictions are excellent so I look forwards to those coming true as well.

However of course, a few years ago we were "way ahead of schedule" then
"fell behind schedule" as the stock market blew apart, but aggressive savings has covered the potential shortfalls and now it is right on target.

The biggest investing lesson of the year was that health can really mess up your investment plans. At the time I was moving more fully into the market, I was knocked out by a deadly pathogen and hospitalized. This took my interest away from financial matters so the "jump into the rally" fizzled into "move money in late and in a haphazard way once alive".

From a macroeconomic perspective, it seemed that timing the market was all about what needed to be done over the past 18 months. The proper timing, and you could do well. If you didn't, you could be hurt badly.

Is this investing anymore, or gambling?

On the bright side, being unable to change investments very much through much of the tulmult for some accounts led to reasonable returns. If you consider a loss of 22% in an asset over the past 3 years when at one point it was down more than 50% reasonable that is, for at least some of the accounts. Is that a victory or a defeat? (In accounts which were not touched over the span of the last period of incredible volatility).

The series of events over the past two years has changed my overall philosophy a bit about investing.

I am taking investing in equities less seriously. It seems more haphazard and random than I ever believed before, which gives less credibility to the investments overall. This doesn't diminish my interest in savings, but rather diminishes my confidence that the savings will be going steadily up due to innovation and efficiency in the overall economy. This means considering other less exciting ways to earn money off money.

It makes me think harder about getting an investment property, which probably has lower returns, but at least you can look at it and see what is going wrong, rather than trying to look into balance sheets that are deceptive and covering up toxic problems. It makes the idea of owning a rental property seem less far fetched, and more like a solid mix for diversification purposes, much better than an REIT in terms of being able to see what is going on with it.

The big financial news for this year is that the house is now paid off, fully. This was a long term dream of mine, and the end of the dream was pretty much, a boring letdown. A check is written. There are no longer drafts taken out of the account. No one notices. We tell no one, because it is egotistical and will probably only generate envy and serve no good purpose.

The advantage is that money is now slowly accreting in a more apparent way than before without the mortgage getting pulled out. However, major house repairs on the horizon will rapidly diminish this pool of money, so it won't be until probably after this upcoming year that it will have any big effect on our ability to save.

We still have a position in gold, but not as much as one should have had (over the past rally) and now there are two sides screaming loudly that it should be going up (or down).

Mechanical investing seems very attractive, but the reality of being able to catch the signals and act on them in a timely way seems remote. If you are on vacation, do you really want to be checking your signals?
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