So if you have not noticed, the price of just about everything is going up…while our salaries are staying the same. Some say recession, some say depression, some say all is fine. But no matter what the reason, times are getting tougher. Hospital costs are up 8%, gasoline 33%, overall prices on everything 4%. But according to Money Magazine, there are three rules to follow in times of inflation that could ease the pain:
When I graduated college in 1994, I did not know anything about investing. Nothing. I have written before about how I spent money like it was going out of style back in those days, and one of the things that I did with my money was chase stocks. Remember the internet boom? I was there – buying and selling stocks and not having a clue about what I was doing! Everyone I knew was making a killing in the stock market, so I had to get in, right? I should have stayed out.
OK not closing exactly, but it sounded cool 
– several international markets have suspended trading due to dropping indexes:
India’s benchmark Sensex crashed by 11.53 per cent on Tuesday morning which resulted in the Indian stock market being closed for an hour, a news report said. The 30-share Sensex tumbled by 2,029 points to 15,576.35 soon after it opened on Tuesday morning, leading to suspension of trading on the bourse for an hour, the PTI news agency reported. According to trading norms, if the stock market witnesses a gain or loss of more than 10 per cent, trading has to be suspended for an hour. The crash came after the Sensex suffered a massive loss of 1,400 points or 7.41 per cent, tracking global fears of a recession on Monday.
And how do you see it? Will you buy a lot and hold on? Will it be a fire sale? Or will you start drinking early?
From CNN:
Stocks fell sharply worldwide Monday following declines on Wall Street last week amid investor pessimism over the U.S. government’s stimulus plan to prevent a recession…ritain’s benchmark FTSE-100 slumped 5.5 percent to 5,578.20, France’s CAC-40 Index tumbled 6.8 percent to 4,744.15, and Germany’s blue-chip DAX 30 plunged 7.2 percent to 6,790.19.
In Asia, India’s benchmark stock index tumbled 7.4 percent, while Hong Kong’s blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.
I’m sure that if you do any kind of investing at all you have heard about target-date retirement funds, where the stock and bond allocation inside the fund changes as you near your retirement date. All you have to do is pick a year (for me, it is supposedly 2040) and the fund managers do all the work. The basic idea behind them is that the closer you get to your retirement date, the more the allocation in the fund moves away from stocks and into cash holdings, to protect your investment. In other words, they become more conservative over time in an effort to prevent you from losing your retirement money. Sounds good, right? Well while they have gotten a lot of press lately, not all of it has been good. As for me, I believe in them and I have a Roth IRA invested in a TRowePrice target-date fund, but there are many people out there who think that they might not be a good idea. The fund I am invested in with Price is said to be one of the better ones, so I am happy about that, but let’s take a look at the pros and cons of these target-date retirement funds.
