Whenever we talk personal finance on DKos, some people will inevitably climb up onto the highest available perch, beat their chests, and announce how they timed the market perfectly, have now found the best place to stash their funds given the inevitably upcoming decline of Western civilization, etc.
Such people will no doubt show up here, but this diary is not for them. This diary is for the rest of us.
Aside from a chunk that has remained in cash (invested at a pretty decent long-term rate a while ago, I have the rest of my retirement investments through the fund serving college professors, TIAA-CREF.
My 4Q statement (fourth quarter, 10/1 to 12/31, containing final figures for the year) came today. It's my chance to assess just what the Bush era did to my finances in 2008. I don't mind sharing -- at least sharing percentages.
For the year, I am down approximately 27.5% in my non-cash investments. From what I can tell, I got fairly lucky.
What interested me, though, is how that happened, broken down by fund.
By far most of my money is in a Social Choice account: one that tries to avoid investments in areas that are less socially obnoxious than others. CREF's Social Choice fund is down 23.45% for the past year, a third less than the best of the others. I find that interesting.
I have a smattering of money invested more aggressively. (Well, now it's a smattering. It was less of a smattering a year ago.) Long ago, I put money in four funds and decided to ride it out. (My friends may be able to figure out how I chose these four areas.) They are Growth (aggressive stock investments), Real Estate (self-explanatory), Equity Index (very general, tied to overall market) and Global Equities (focus on international investing.)
For the past year, here's the rest of the scorecard:
Growth is down 39.78%
Real Estate is down 14.15%
Equity Index is down 37.5%
Global Equaties is down 42.29%
I started out with the same amount of money in each of these funds; the amount left in the Real Estate fund is now almost twice as large as the best of the others, more than twice as large as the worst.
What about the disastrous last quarter alone? This gives the lie to the assertion that our problems started when Lehman Brothers dove into an empty pool. Here's what happened last quarter:
Social Choice down 13.37%
Real Estate down 13.18%
Growth down 22.89%
Equity down 22.79%
Global down 23.01%
That they are so equal suggests to me that the money managers may have flown to safer investments, as far as their charters would allow, although I haven't checked.
None of that the above bothers me that much; emotionally, I still feel that I was playing this game with Monolpoly money. To be truly bothered, I have to look to 10 year earnings, which capture most of my investment history in them (and all of my history in some of them.) Here is the current news of their average change per year over ten years:
Social Choice: up 1.52%
Growth: down 4.94%
Real Estate: up 7.29%
Equities: down 1.12%
Global: down 1.01%
That means that, for me, in effect, it as if most of the boom that just went bust never happened. That's OK; I wasn't counting on the money and I'm glad that I kept more in cash and CDs than I was supposed to. This was not due to intelligence, mostly to laziness. I'm not interested in devoting my intelligence to figuring out how to make money from nothing, so I'll let inflation eat away at some income, convince my kids that we like to live cheaply, cut back on my political donations (that's the part that really hurts), and prepare to earn by my labor rather than my capital.
I am interested in a few things, though, based on my status as only a casual reader of the business press. (I know that each of these funds does not perfectly represent its sector or class of funds, but with a large and relatively "prudent" place like TIAA-CREF, it doesn't seem like a bad place to try to understand economic changes.
Why is Real Estate still so far up? Is the prophesied bust in the commercial sector just not yet factored in? Or is the case that smart people have been able to choose carefully and wisely to stay afloat?
Given that Social Choice is largely an equities fund, why is it doing so much better than the others three of them? Is it simply because it is itself a "balanced" fund, containing some bonds and case, or is it because stocks that aren't as evil haven't been hammered as badly? (This is a surprise to me, if so: I've figured that defense is still thriving.)
I understand why Growth has been hammered the worst, but why are Global and Equities so similar? I would have expected more divergence, by random change, in one direction or the other.
Anyway, this is one of those times when I'm using a diary as a diary, just a message in the bottle to retrieve and read again in some future year. I leave you again with one thought that can't be said too often: if we had allowed Social Security funds to be invested in the stock market, as the outgoing President and most of the rest of his party wanted, we would have many more people starving in the street in the near future. It can't be said enough. Can't we be a little bit more like the Republicans and say it publicly a little more. I think people will be listening.