Anyone else getting hammered...

It's been brutal. But I'm young enough to earn it back plus some. My parents (and many who have parents in their late 60's/70's) are the ones who are hurting. Many of that age are relying on investments to supplement their social security checks.

My retirement investments have dropped by nearly 40% in value over the last year.

 

I'm wondering how many clicked on the thread title to see if this was about getting drunk. Then, after reading the thread, maybe did.

 

Research mutual funds. Decide the risk you willing to take as different funds carry different risk levels. Most funds are stronger in certain sectors like technology or healthcare so go with one in an area you feel has the stronger future. Look for a 10 year record. Check fees. Find one you can get started with for $500.

If you have more than that, I would look at a second fund in another specialty or type and so on. Diversify.

Having said all that, I'm a guy who lost about 40% of his retirement in the last year following the above advice.

:grrr:

 

If I were you, I would do four things before getting too deep into the stock market...

1. Get out of debt. If you owe anything on credit cards, you are sinking because there is no way you can out-earn the financing fees. There are many low-rate cards which you can roll the entire debt into and begin to get aggressive in paying it off. Easier said than done but it's tough to save/invest when you are stretched because of debt. Establish a budget and stick with it.

2. Make sure you have an emergency fund in place. Three months (or more) of living expenses is ideal and takes a while to build (especially if you are doing #1). For at least one month's needs, keep it in a mutual fund that earns little but is there if needed right away. The rest I invest into a couple of mutual funds. One may be more aggressive growth and the other more moderate but the idea here is to do it via automatic withdraw from your bank. I rarely miss what I don't see and this has been the smartest thing I've done to start building a fund.

3. Start a Roth IRA or some type of retirement fund if you don't have a 401K already. If your employer matches 4-5%, do the same because it's FREE money. If you have the luxury of putting that into 3-5 different funds, then diversify. Since you are military, I assume you have other options must of us don't so you may not have to do as much as those of us depending on social security. It doesn't take a lot to build a nice nest egg 38 years from now.

4. Start a college fund. From reading your posts, I think you have at least one and I started right away putting $50-$100 a month into a fund. You'll be amazed at how a little money now will add up in 10-15 years if the market averages what is has in growth the last 75 years (10%). There are many options here but we went with a UTMA which basically creates a joint account taxed at the child's rate. The child owns it at age 18. Have that money auto withdraw from your checking account each month as well.

Sorry for the length of this but I hope some of it helps. It's pretty much what you'll hear if you listen to Dave Ramsey. Other things include looking at paying higher deductibles for insurance, mortgaging your home for only 15 years, buying a used car, etc.