I’m Paralyzed When It Comes to Investing (and in that, I’m hardly alone)

(Does he look like a gambler? Some say Alan Greenspan’s policies–as Fed Chairman–poised the US on a precipitous path)

OK, I finished. It took me three days of poring over documents, checking last year’s return, making sure I’ve covered all the bases to get my return accurate. Why be so thorough? I don’t wish to invite an audit, for I understand once you’re on the Fed’s radar screen, it’s nearly impossible to get off. And if the truth be told, I’m a bit of an obsessive; as such, I try to do everything thoroughly. It can be my greatest asset—and fault.

But I’m annoyed with myself, for I have a chunk of money that I can’t seem to move to a place where I make any money on it—not even a negligible 1%. That’s right….I let it hang in a checking account where it makes no interest (which translates to losing money since it doesn’t even keep up with inflation).

Oh, I hear Suze Orman and her continual war cry of “Buy municipal bonds,” but then I read where cities (those are “municipalities”—right?) are in the red. They barely limp along, claiming pension underfunding. They predict dire consequences for the future. In the meantime, they live on borrowed funds; some even have funds reduced to junk-bond status. When folks say: “Well, if the states fail, the government will step in and bail them out,” that terrifies me more for I realize they’re ALL on shaky footing (Didn’t we just hear the government gave itself another 3-week budget extension, so it doesn’t go “belly-up”?)

In my estimation, those people never seem to really understand: “We are the government” (and we can’t bail out everybody!)

Orman also suggests investing in utilities that will pay the investor dividends, but there again, I fear I’ll choose the one utility that will become obsolete in the near future (a railroad that goes under because it no longer services one of the municipalities that went belly-up).

Oh, I know it doesn’t make sense to drag my feet in this investment dilemma, but I find few options with which I’m comfortable.

So, how did I get to my current paralysis?

That’s easy. I was one of those who rode the frenzied Stock Market in the 90’s—until it came to a crashing halt. Up to then, I spent whole days glued to the TV, watching Mark Haines and Joe Kernan on “Squawkbox”. I hate to admit this, but my sole occupation at that time was tallying my portfolio which showed a prodigious leap in value each day. If I floated in some giddy pool of unsustainable joy, I can only think how pleased were the big guns were who made the REAL MONEY.

Now, growing a portfolio in that day didn’t demand any particular skill: If one threw a dart into a pool of investment contenders, they’d pretty much all come out winners….All, that is, but a few exceptions.

Those were the ones I ultimately invested in. For instance, I bought Qualcomm three times, when it was at the pinnacle of its glory (and its stock was costliest) and sold it each time when it tanked (because I feared it’d go lower).

I listened to a stock advisor who recommended a diversified portfolio that included a hefty component of a communication conglomerate in Mexico and despite my fear that Mexico’s government had a track record for instability, I deferred to his judgment. End result? When I sold the stock (as it skidded to invisibility), I lost thousands. The only good news is that that same stock will now provide me with the annual $3000 capital-loss write-off on tax returns into perpetuity. Adding insult to injury, I recently saw Carlos Slim guest on a TV talk-show (he’s the richest man in the world) explaining how he made his fabulous wealth: He bought up a sizable share of that communications industry in Mexico (Yes, miine was probably in that batch). Slim knew when to buy; I obviously did not.

So, I’m one of those burned by the Stock Market, one who now knows the truth of Greenspan’s “irrational exuberance” phrase (he coined it on March 3, 2009). I never bothered to learn how to invest…I just rolled the dice…threw the darts…whatever metaphor one chooses. What I really mean is: I had no business gambling in this medium, considering I had no expertise…no method of assessing.

In any case, I don’t feel too bad about the losses I suffered since I’ve since learned that even the wizards of Wall Street were snookered by the likes of Bernie Madoff and others. Then there was the bamboozling of the government via big money interests when they asked for and received the TARP money (without appropriate oversight). Now, some of those same banks that we rescued have turned on us, instituting rates and penalties that smack of usury. How quickly they forget that it was we who extended to them life support when they needed it.

At the end of the day, if Suze Orman wants me (and countless others in America) to invest, she’ll have to find a way of easing us out of paralysis, for I know I continue to hear this refrain in my brain: “Fool me once, shame on you…Fool me twice, shame on me.”

Now, Biddy asks: “How about you?” “Have you recovered emotionally from the drubbing we all took vis-a-vis the Stock Market?” “Have you dipped your toe back into the financial pool or are you stuck, too, with CD’s making lackluster returns?” It’s occurred to me recently that maybe I just need the encouragement of a post traumatic stress disorder therapist to help in my financial recovery. Biddy’s looking for direction. Got advice? Hit the “Comment” section below…It won’t cost you anything. Promise!






About admin

A lifetime teacher and realtor who's now a published writer, Colleen Kelly Mellor is a humorist first, ever aware of the thread that connects us all. Her works have appeared in the WSJ, Providence Journal, and CNN and NY Times-acclaimed medical blog, kevinMD.com, to name a few. All material on this blog is exclusive property of the author and cannot be reproduced without this author's express written consent.
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