Investing for Retirement

Micro-credit is an economic concept that has been around for about thirty years. In 2006, Dr. Muhammad Yunus & Grameen Bank garnered a Nobel Peace Prize for offering micro-credit in an effort to alleviate poverty in Bangladesh. Thanks to the efforts of Dr. Yunus and many others, micro-credit is beginning to break down the barriers that have kept people in poverty for generations. Most of the chronically poor cannot easily avail themselves of standard financial services. They have insufficient funds to maintain a bank account and few assets to act as collateral for a conventional loan. Micro-finance bridges this gap by making very small loans, sometimes less than $100, available to poor individuals to help them harness their talents and opportunities to build a sustainable enterprise. Though not perfect, it won't work in every environment and not every loan is fully paid off, it has proven to be effective.

In 2006, MicroPlace.com became a part of eBay, thereby giving small investors an opportunity to purchase securities in support of micro-finance. While the cash returns may be meager, the value to the world and especially those who are able to work their way out of poverty through their own enterprise is enormous. Just this week they announced that investments were available in support of poverty relief in North America as well as the Third World. This is an opportunity to put some of your "dead presidents" to work on foreign or domestic policy.

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I'll admit I'm no pro at investing, so I'm rooting around looking for advice from the folks who know. Here's a little story from Jim Cramer's Mad Money show on CNBC on five simple rules the pros know (and that amateurs like me should learn).

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When I transferred my Ret $'s to Vanguard I thought an age related fund made a lot of sense since my need for secure, less volatile funds would increase the nearer to retirement. The funding level is now 25% bonds 75% stocks. I'm not feeling comfortable with that now. I don't think w/ 11 yrs to go that I should be that conservative but I also think there's a serious market correction coming on before I retire. I'm interested in hearing what others are doing and why.

Thanks to Grandmother and her son (aka, Dad), my siblings and I inherited a nice chunk of stock, but all of one company. While said company is doing quite well, and paying nice dividends, I realized I had zero diversity. A change in stock price of just a few cents can be quite exhilarating or appalling (I try not to look). While in my father's hands, the dividends were largely reinvested in more of the same shares, but I decided to use that cash to branch out and broaden my base, hoping for more stability. Proceeds from the "legacy portfolio" now fund my Roth IRA, giving me opportunity to pursue other opportunities to stock up.

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In the news today, one of my favorite companies is flying high on their fiscal third quarter report which details in part:

Apple® today announced financial results for its fiscal 2008 third quarter ended June 28, 2008. The Company posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. These results compare to revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share, in the year-ago quarter. Gross margin was 34.8 percent, down from 36.9 percent in the year-ago quarter. International sales accounted for 42 percent of the quarter’s revenue.

While I'm glad to see Apple doing so well, it's one of those "could'a, would'a, should'a" situations. Too bad I didn't buy in when it was under $20 in the later part of 2004. But even if I had invested $1099 in Apple stock in mid June of 2006 instead of buying this MacBook laptop, the stock would have been worth about $3160 at today's close. That's pretty good return, but the laptop's been a lot of fun, too.

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Necessity, who is the mother of invention. - Plato

That being so, the current necessity to conserve fuel to control costs is creating a money making opportunity for many clever entrepreneurs and their astute investors. Just this week, a piece appeared in our local paper on a couple of guys who have harnessed GPS location to help cities manage their service fleets more efficiently. So even in a challenging economy, there are opportunities to be found. When you think of investing, ask yourself "What works?" What do you need? What makes your life better? What is indispensable? Could be there's a way to get in on the action.

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...So when will we see ga$ do the same? It may be a while, but at least the constantly rising prices should level off. Soft demand was cited as a major factor in turning this market around. Well done, my fellow Americans! Let's keep on conserving (I'm doing a lot less driving) even if prices do come down. It helps our personal finances, helps lower the trade deficit and benefits the planet. We all win, again and again.

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This is certainly a quiet group. Last message posted was over 70 days ago?

Is you broker a member of SIPC (Securities Investor Protection Corporation)? It's bad enough that stock prices are trending down these days. But as long as the companies you've invested in remain solvent there is hope they will recover and move ahead, bringing stock values back up. But, while you patiently wait for better days, what if your broker goes out of business! :-0 Then the above question can matter a great deal.

The SIPC cannot protect you from falling stock prices or bankruptcy of the corporations you have invested in (investing is inherently a risk venture), but if the company you invest through closes its doors, and its web site, there is hope that in a reasonable time the cash and securities in your account will be returned. This is where the SIPC steps in.

To facilitate that process, you will need to know just what you have invested. Be sure to keep periodic statements on file. If you do your trading on-line, be sure to print copies of your statement. Should your broker go out of business, your access to on-line records is likely to disappear. And of course, first and foremost, find out if your broker is a member of SIPC and that your account is covered. It offers at least one measure of protection in unsettling times.

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The Manager of this group seems to have been absent for a long time! Anyone up for taking on the job of managing this group? It's easy and fun and this is a cool group that is active and cookin'! PM me and let me know and I can make it happen!