This one is by reader OldVet
What do investors do? (or, Personal Grooming of Money, not Monkeys)
Let’s say events in the US and world economies play themselves out, and that not all the information, bad or good, is critical. Maybe predictions come true, maybe not. Let’s say you don’t know what is going to happen exactly, but you want to be sensible. Most of us have a bit of savings, or retirement funds, or a nest egg. Some of us are planning careers or career changes. Some are thinking about major purchases. Some are retired or thinking about retiring. Some are planning business moves into new sectors. Some are just interested in markets.
Some months ago, almost in a brief aside on another subject, I found that Steve Kyle, one of the writers on this blog, and I were on the same page. No dollars, careful of stocks that don’t pay dividends, take a look at bonds, assume oil will stay expensive, plan for a sharp decline in the US economy. Nothing fancy, just cautious behavior.
Why bother to bring it up on a Blog that normally doesn’t concern itself with personal finance? Because guess who the biggest idiot on the planet was in 2001? Me. We watched our savings lose 35% over two years, and every week my Smarter Half and I discussed it and thought it would get better, or turn around soon, since it always did. But it didn’t, until recently. One and a half Smart Economist s froze in indecision. We flipped a coin and starting in 2003 I started studying the arcana of stocks and bonds, funds, currencies, trading, investing and the like. Every day I had the luxury of 2-4 hours a day of study, and gradually began investing according to my view of things. I made plenty of mistakes, and still do. No, there will be no anecdotes. The one great lesson in four years has been this is: Plan ahead, be ready to do something if necessary, based on developments.
I think there’s a lot of interest and there are a lot of good people who visit Angry Bear who are uneasy with managing their savings.
In terms of planning, what do you do, and what do you expect to happen to your savings in the next couple of years? Have you got some sort of plan?