Friday, October 10, 2008

I refuse to freak out

Many of my friends at work are asking the question "Have you looked at your 401K lately?" It's become an issue of sarcastic pride. Who's lost more? Who's most worried? Who has done something rash with their investments?

I've looked at my retirement account, and I'm down since the beginning of the year. But I refuse to do anything irrational with my money. While I am worried about the economy, I'm not going to retire for at least 30 years. Over the long term, the stock market is an excellent place to keep your money. I'm confident that the market will eventually recover and that my portfolio will grow again. Until then, I will continue to buy shares in my mutual fund at a premium, and take advantage of my employer's generous matching benefit. If you're my age (34) or younger, I don't see any reason to worry about the short-term stock market gyrations. Those of us in the early to middle stages of our careers should ride it out and see what happens.

I am more concerned about bank failures and returns on my savings accounts. I keep my money with some of the larger banks, so I don't think I'll see a failure, but I do think I need to watch my interest rates with caution. I have the recent windfall from my lease buyout to keep safe until such a time as I want to use it as a down payment for buying a house or apartment. I can't afford to take a loss on that money. And I'm worried long-term about the nation's unimaginable debt.

Which brings me to the topic of the election. The Republicans have gotten plenty of campaign fodder from the old saw about Democrats being "tax and spend liberals." But the past eight years of the Bush administration's fiscal policies have grown this country's debt to an inconceivable $10 trillion dollars. When you cut taxes, then fund two wars without end, you need to find the money to pay for it somewhere. Apparently we found it in China. My generation and future generations are going to pay for the sheer irresponsibility and mismanagement of the current administration. If I didn't have enough reasons to vote for Obama/Biden before this past month, I certainly have enough now. If nothing else, I believe that Obama affords us the best chance to repair our image overseas, extricate ourselves from Iraq, and get our financial crisis under control.

That turned into an unintentional rant, but I'm going to leave it there.

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