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Friday money chat with Grant Carroll

by Frank Mungeam

Bio | Email | Follow: @KGWNews

kgw.com

Posted on October 10, 2008 at 12:55 PM

Updated Wednesday, Nov 4 at 2:35 PM

Grant Carroll, financial expert from Strategic Alliance will be answering your money questions from noon to 1 p.m. in KGW's Your Money blog. To submit a question, just scroll to the bottom and fill out the COMMENTS form.
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Julie,

Saving is a great idea. 401(k) plans are for long term retirement saving, offer current tax deductions, offer diversified investment choices, and potentially employer contributions. So long as you have ten or more years to accumulate contributing on a monthly basis will help you accumulate more shares at lower prices over time. Check with your employer about any matching or profit sharing.

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Brad,

Stock prices are at historic lows which equals a good time to buy. Purchasing stocks is a good decision so long as investors have longer time periods and can stomach possible decreases in their investment over the short term.

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brad said:
i have tax free bonds that have lost 6,000 since the begining of the year do you see tax free bonds still a good backfall also i get around $300 a month tax free dividend from this

Brad, If you own the bonds directly from the issuer and not in a mutual fund, you will receive the face amount of the bonds at maturity from the issuer. The flucuation in price shouldn't worry you. The $300 a month/$3600 annually is a good tax free income source.

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Marvin said:
I have a tax sheltered annuity retirement account with ING. 40% is what they conservative, 43% moderate risk, and 12% aggressive. During the last year, the value of the account has dropped by over $20,000 (25%). My stance has been to let it ride, since I won't start drawing on the fund for a couple more years. Now I don't know what to do or how to do it. Suggestions.

Marvin, Your current decrease in value of 25% over the last year is much less than that of the general stock market due to your smart decision to diversify. You should visit with an adviser to build a plan that will address your personal income needs, timeline when you will need income, and consider longer term economic trends to maintain the correct mix of assets.
The Financial Planning Association website can provide you with helpful tools and even a listing of their members.

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Gaylon said:
I have a 401k at work in which I contribute 15% of my own pretax income. Would it be a good idea to decrease my contribution?
I have about 70% in the stock market and I plan to retire in ten years.

Gaylon, now is a great time to keep dollar cost averaging into the market - we haven't seen securities at these values since 2003. Ten years is only until you retire, not how long you need the money to provide you income. Stay diversified, get the employer match (if there is one), get the tax deduction - all good reasons to continue contributions.

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Jim said:
At what point should one take there money out?
I have left a couple of messages for my personal broker and it seems that he's pretty tied up right now! I wounder how far should I let it go until I do something about it?

Jim, It is hard to pull long term money out of the market. It is a guaranteed loss, and then you have to time when to put it back in. Keep calling/emailing/texting your broker. He/she needs to respond.

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Lawrence said:
What is the safest place to move money?

Lawrence, "safe" means different things to different people. Safe from principal loss would be a short term US Treasury bill or CD from a bank. CDs though aren't immediately liquid. If you want liquid, savings accounts or insured money money market are a good choice.

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Lynne,

Your "expert" is advising you correctly. Even though this market correction is historic in its depth and quickness, being steady NOW with a plan you created before all of this certainty started is the smart move. Not trusting your adviser is another issue you need to address.

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Lynne said:
I am/was within 2 years of retirement. Our financial "expert" has pretty much said hold tight. Meanwhile I am losing $$ and paying him! Not sure if he is giving the best advice since he probably doesn't want to lose income from me and others. What do you think is the best step for me?


Leonard said:
Unbelieveable! How low can the market go? Is it too late to sell, sell, sell?

Leonard,

I understand you concern. The market can go as low as investors will make it. Whether it is too late to sell depends upon your use of the money. Short term money needs shouldn't have been in the market. Longer term money should be diverisified and allocated across various assets classes.

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