Wednesday, October 1, 2008

Newest amusement park thrill ride

I'm a HUGE roller coaster fan. In fact, I even spent a (semi-torturous) summer working at Cedar Point ("America's Roller Coast"). I love that feeling of thinking of your stomach is going to spew out of your nostrils and your butt jumping out of the seat at any moment. It's fun and exciting because, for the most part, it's fake danger. Most rides at permanent amusement parks are inspected daily by teams of highly skilled mechanics and engineers. The adrenalin rush you get leaves you terrified for a moment, but then invigorated and elated.

I can't say my level of enthusiasm for the recent stock market swings reaches the same heights. In the past few days, while Congress discusses what should be done about the financial sector of our economy, my 401(k) has nearly given me whiplash. After Monday's debacle, I was down 6.6% in that one day loss. After yesterday's up, I've regained 3.4%. (Amazing how it doesn't seem to go up nearly as fast as it goes down.) And for the year, I've "lost" nearly 21%. Ouch! I say "lost" because I haven't actually sold anything or moved anything. Since I have over 30 years until retirement, I'm very aggressively invested. That seemed like a great idea last year when my return was nearing the double digits.

For a brief moment last week I started to get scared. Really scared. These ups and downs aren't like those stomach butterflies manufactured for us at amusement parks. These ups and downs have real consequences. Will I have a roof over my head? Will I be able to feed myself (and my family, if I had one)? Will I have a job this time next year? Will I be supporting my parents, who are nearing retirement age, when they can no longer afford to support themselves?

All of these fears nearly froze me in my tracks. So, rather than let them consume me, I stood up, dusted myself off and pulled out the biggest stick I had to beat them off. I RAISED my 401(k) contributions. It was a scary thing to do, but the stock market is having a fire sale and what better time to stock up? I've got TONS of time to ride out these ups and downs.

So, if you're in a similar boat, buckle up, keep your hands and arms inside the ride at all times and prepare for what could be the most profitable thrill ride you've ever been on.


Jill said...

I checked my balances yesterday for the first time in a month (or at least during this latest sell-off). GULP! My 401(k) is taking a beating, but like you said, I can't do anything with it for a good 30 or so years, so why worry too much about it?

Heather said...

Yeah....and the hits keep on coming. I'm hopeful that a new administration (go Barrack!) will turn things around. Jim Cramer (of Mad Money) said that if you need your money within the next 5 years, you should pull it out now. GULP!


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