Thursday, June 15, 2006

Gloom and Doom

It sure is fun reading the news lately, isn't it? All these worries about stocks tanking, inflation rising, the housing market imploding, consumer debt ballooning... not to mention the costs of various wars, diseases, social problems, environmental problems, etc. Of course someone somewhere is always worried that things are going badly or will be very soon... but lately that attitude seems more prevalent.
How do you deal with it? How do you relate it to your own life? What do you see as affecting you most?
For me, gas prices are in the background-- I rarely need to drive, so though I know they affect the prices of other things, I don't stress too much about gas prices.
But other forms of inflation: that worries me. Sure, why wouldn't it? No one wants to pay more for things, especially since salary increases never seem to keep up.
Interest rates: now that I have my own mortgage rate locked, I don't worry as much about that, on one level. I will still have some cash in bank accounts and if I can earn a few more pennies on it, great. But if rising rates keep killing the stock market, I lose a lot more than I could ever gain in those pennies of interest. My retirement accounts are down by thousands of dollars from just a month or two ago. I have a while to ride out downturns, but it's a killer to see your diligent savings evaporate the minute they go into your retirement fund.
Housing market: I will have many anxious moments about housing prices, I'm sure. I'm buying at will probably in retrospect be seen as a peak in prices not to be seen again for a few years. But it just makes me wish I had bought earlier. If something happened that forced me to sell my condo anytime soon, I'd probably lose money. But since I don't plan to sell, and have a fixed rate mortgage, a downturn in the housing market should be something I can ride out. And if rents are going up, as they seem to be doing in NYC because people can't afford to buy or just prefer to wait, then that is a safety net for me if I ever have to move out but don't want to sell right away.
As for diseases, wars, social and environmental problems... if I think too much about all this depressing stuff, I'll become convinced that the world will end next year anyway, so I think I'll save those for another post.


savvy said...

We've taken quite the hit on our retirement accounts as well, and we are considering purchasing an investment property as well. Some people (myself included) think this is crazy, but I've determined that if we try to wait until the "right" time we might not ever make a move. Instead, we have decided that buy and hold is our strategy, and any mistakes we make, whether it is with our retirement accounts, stock purchases, or real estate, will eventually be erased with time.

It's the only way to stay sane.

mapgirl said...

When it comes to buying into my retirement funds, I just think 'Dollar Cost Averaging'. I'm getting shares cheaper right now. I'm with Savvy Saver, holding on is the best way to ride out this storm.

Anonymous said...

I bet you are relieved that you cashed out your down payment money before the market started tanking. There is a huge lesson here about making sure that money that you know you will soon be spending sits in stable/fixed investments rather than the stock market... You got lucky!

Single Ma said...
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Single Ma said...

I try to look at the bright side or else I'd be in a straight jacket.

Rising Interest Rates: higher earnings on my "safe" accounts.

Housing Market Imploding: as long as I'm living, I'll always need a place to lay my head.

Stock Market Tanking: buy when things are bad, watch and enjoy when things are good.

Consumer Debt Ballooning: we live in a country where we have the freedom to make our own decisions.

Disease, wars, etc: this life is only temporary, thank God for a perfect heaven.

Gas Prices: own the stock and a gas rebate credit card to offset the pain.

Kira said...

A good chunk of many of these problems is that a lot of people are really too optimistic. You can't be down in the mouth all the time, but they think that they can afford anything, and never look at historical perspectives. I've noticed that people who are in their 60s aren't complaining about gas prices as much as us younger people, presumably because they paid the high prices in the 70s when that gas crisis hit.

Another factor is that all of these worldwide bad things were always happening, we just didn't hear about them constantly. I remember reading some time ago that crime rates in rural areas haven't changed dramatically over the last 150 years, it's just when somebody went nuts and chopped up their wife, it didn't make front page.

Tiredbuthappy said...

Yeah, my accounts are down. We're all down. It does hurt watching those biweekly contributions going in, while the balance doesn't ever seem to rise at all. But just think, all these bargains we're getting now in our workplace retirement plans are going to help us zoom to new highs when the market adjusts again.