Sunday, January 20, 2008

Flop's guide to retirement investing

I am not a certified financial anything. Follow my advice at your own risk and peril.

Like many of you, I see in the daily heavings of the stock market a coming storm. The credit crisis is much more than subprime mortgages not performing. It could be really bad.

I was thinking about this today as I mulled changing the mix in my 401(k) account. Right now, my retirement nest egg largely lives in an S&P 500 index fund. This is because it spreads the risk across companies -- good ones -- that are meant to stand the test of time. I also do this because very little of my investment dollars go to paying a fund manager who's probably just going to do shit like short Apple and keep tons of cash on hand in a bull market. A monkey can administer an index fund; bananas and monkey pellets are cheaper than martinis and BMWs.

I considered lessening my exposure to a possible Black ___day-style crash. Then I had a realization. I'm saving for retirement, not that pleasant feeling four times a year when I open my mail and gaze upon a sum of money I would best characterize as "a shitload." If the stock market is still in the shitter 30 years from now, I'll have other issues. And will probably be looking to take an immediate long position in Mossbergs and buckshot, to keep those fucking mole people off my stash.

Cole Slaw Blog Personal Finance Adviser Flop does not and has not owned any of the securities or commodities mentioned in this article, except for the time when he made a simple, honest mistake between put and call options on the Brazilian Mercantile and Futures Exchange, resulting in sanctions from Mercosul, dozens of frantic calls to zoos, comedy troupes and soup kitchens, and a public-nuisance lawsuit filed by Washtenaw County.

3 comments:

Anonymous said...

Dear Flop,

You are a wise and experienced sage -- a true credit to investors everywhere.

Question: If I invest in an index fund outside of a 401K, does it have any of the thorny tax issues associated with a conventional mutual fund? Even in good years, I feel like too much of my mutual fund gains end up in taxes.

Anonymous said...

International Baby, International.

Anonymous said...

BMB -- Beats the hell out of me. Thanks for writing in!