Category: Finance

As the stock market has spiraled downwards the last few weeks, I’ve been trying to buy shares while they were on sale. This worked pretty well with Suntrust during its ups and downs. I had cash sitting in a number of different places: the credit union, PayPal, ING, and a money market fund with Vanguard. I had bought some Google after it dropped way off in February, bought some more in March after it dropped 20%, then sold some after it went back up. In September it was back down and I bought some more. Then Dell and Intel released bad forecasts and dropped a lot, so I bought some of that. As the rest of the market went south, those stayed around the same level until this week when they were both down 20% again, so I bought some more Google and some more Intel. Meanwhile, this week Suntrust was back down again, so I got some of that earlier in the week. Last week I put some money in Vanguard Index 500 and used last week’s Suntrust proceeds to get some Apple, seemingly cheap at $98, but could have had it for $89 this week easily enough. Foreign markets were really hammered lately, so I bought some more Janus Overseas this week, then with the last of the cash I was willing to put at risk, I bought a little more today. Now I’m on the sidelines and the market is on its own. I’m tapped out.

I still have money that isn’t in the stock market, like my Washington Mutual CD, my Series I Savings Bonds generating 5% and 6% returns, and a reserve in my ING account drawing 2.75%. The website Savings Bond Advisor has a chart comparing investing one dollar a month in the Vanguard 500 index fund or one dollar a month in Series I Savings Bonds since those inflation-indexed bonds were introduced in 1998. They also show the total amount invested and the Index 500 is about to go below the accumulated principle. This means that putting your money under your mattress would outperform the S&P 500 over the last 10 years. Accordingly, my deferred compensation account went below the level of the principle just today after 16 years of monthly contributions going to stock mutual funds (not quite true, see graph in comment below). Oh well. The good thing is that with my Roth IRA I can’t take out any earnings without a penalty, but right now I can take out all of it if I want. In fact, it could go up about 40% and I could still take it all out.

I think the market has to be oversold, but it could also drop further. And the recession in general seems to have a while to go before it is over, many are saying a year or more. The total I’ve put back in the market this year roughly equals my losses on what I already had invested, so I think that’s probably a decent strategy from an active timing approach. Today the market seemed to find a bottom and recover a little bit, so maybe things will start going back up. That Goldman Sachs stock looks like a really good buy though . . .

I had ordered my free credit reports before, but I had never actually gotten to see my credit score. I’ve never worried about it because I figured it was probably pretty good. I know people with bad credit worry a lot about their scores and things they can do to bring up the score a few points in order to qualify for a better loan or whatever.

Yesterday I got a notice from my mortgage company, Countrywide, that there had been a security breach of their customer info. They were advising me to take precautions, monitor for unusual activity, etc. They also said they would give me a credit monitoring service for two years for free. At first I thought it was a scam, but this wasn’t just a month trial, it was two years. So I figured I would try it out.

The program is called Triple Advantage Credit Monitoring, offered by consumerinfo.com, a subsidiary of Experian. The “triple” advantage I think is that it monitors all three credit reporting agencies.

Once I finished signing up, it generated a report and showed me all of this information they know about my borrowing (and things they have wrong). But it also gave me a credit score. Experian does theirs on an 830-point scale and I got 805. They said this put me in the 99.7 percentile. That’s a pretty good place to be.

I had some cash I wanted to put somewhere and get a good interest rate. I thought about getting another Series I Savings Bond since they currently pay 4.8%, but they penalize you 3 months of interest if you sell them before 5 years. Washington Mutual was advertising 1-year CD’s at 5% last week. I think they are trying to raise cash since they are one of the banks in trouble. I was able to sign up online, but they made me verify my checking account by electronically depositing two small payments (then I report back to them the amounts and they would know everything worked). ING, PayPal, and Google AdSense do the same thing, but it does take a couple of days for the deposits to show up (both less than a dollar, usually less than 20 cents each).

So I waited. Within a day or two I checked my bank account and they had deposited 72 and 94 cents. But I also noticed there was a *third* transaction taking those two deposits back ($1.66). They really are short of money.

The nice thing about it was I don’t have to make an entry in my checkbook register.

Some of the best money I ever lost was when I sold Suntrust last year. I had bought it after Dad said it was probably ripe for a takeover that might increase its price. It had gone down lately, so I bought as many shares as I could with the money I had sitting around in my brokerage account: 19 shares at $77.06. That was in May 2006. It went up slowly but steadily and by the following year was at $90. My goal was to make 20%, so I wouldn’t sell until it got to $93.28. Then it started going down. By October I was losing money. In November I decided to sell at a loss, $71.20. I say it was the best money I ever lost because it really started going down after that and every dollar it went down was a dollar I didn’t lose.

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