A Little Disappointed with TD Ameritrade

by David@MoneyNing.com · 15 comments

td ameritrade is disappointing

My wife’s investment assets are about to be switched over to another brokerage firm. She’s always had an account at TD Ameritrade and when she changed jobs, we felt it was the natural choice to open a traditional IRA account there.

When she called to checkup on the status of the transfer a week after the check from her former company was supposed to arrive at the brokerage firm, she was greeted by what I can only assume is a salesperson. From what my wife told me, the conversation after they told her the money hasn’t arrived yet went something like this.

Brokerage: We can help you with investment options and make sure that you have a well thought out plan to tackle your future.
Emma: Oh I’d like that, how do we get started?
Brokerage: Oh we… actually, how much money is being transferred into the 401k?
Emma: Oh about $8000 since I didn’t work there for that long
Brokerage: oh………… for that amount of money, you might as well not invest. Good bye.

Yes, he actually hung up. I’ve been resisting about posting anything bad about brokerages, even when someone emailed me and told me that they lost $50,000 in one day just because they couldn’t log into TD Ameritrade’s website to cover their short position recently. I felt that it was hard for the brokerage to give any money back for that person because it was impossible for the company to know which claims are true and which are false. However, there is absolutely no excuse for that person to hang up like that. $8,000 is more than enough money to be invested in the stock market. There is absolutely no reason for that person to discourage Emma in that way. Even if it was $800, everyone should be encouraged to save and invest as long as it’s for the long term.

I will be looking for another place to move all her assets. They have lost our business.

Financial Adviser’s Take on the Economy

by David@MoneyNing.com · 11 comments

financial adviser gives advice for the current economic crisis

I followed my coworker a few days ago to a seminar hosted by his financial adviser about the economy and the stock market. Apart from the expected pitch about why their firm is solid and solvent, there were quite a few insightful and interesting comments about investing and what’s going on so I want to share these with you.

This is in no way everything we need to know but I found it pretty informative and hope that you do too.

Expect a Prolonged Period of Slow Economy
Stop hoping that the economy will recover tomorrow because we are just starting to see the slowdown. Technically, the US is not even in a recession yet. They are predicting that the US will enter the recession in the 2nd quarter of 2009.

Bad Economy Does Not Always Equal to Bad Stock Market
One of the speakers came up and gave some very interesting stats.

  • The shortest recession was 9 months and the S&P dropped 46% in that time period
  • The longest recession was 32 months where the S&P happened to also drop 46%

The longest recession was really a depression but the stock market wasn’t any worst off than the shortest recession.  He also went on to say that statistically, the best time to invest in the stock market is 4 months before we get out of a recession.  Obviously, the million dollar question is when we will get out of the recession but this is really anyone’s guess at this point.

Internally, they are predicting the DOW to go to 7,500
I thought falling from 14,000 down to 9,000 was pretty bad, but they believe that the DOW is in for another 1,500 point drop. When we asked why we shouldn’t just sell everything and wait till it drops down to that level and then buy, their response was thought provoking.

If you are really disciplined, then you can try it but it’s not like the 7,500 is a guarantee. We could be 8,500 or even 6,500 and the majority of the people who sell everything are always going to wait too long to get back in. They will keep telling themselves that it’s still too early to get in and miss the huge jump at the beginning that sparks the recovery.

Unless You Have a Crystal Ball, Regular and Consistent Investing is the Only Way to Invest in the Market
So much of the short term movement is going to depend on what the government does so there is really no way of knowing how the stock market will react in the short term. The only way to invest is to put money into the stock market and rely on the American economy to right itself and prosper in the long run (which historically it has done quite well).

Take Comfort, Even a Stock Market Crash Is Not the End of the World

by David@MoneyNing.com · 11 comments

light at the end of the tunnel
Several days ago, I asked readers to share their wisdom with those that couldn’t sleep at night because of the turbulent stock market. Today, I want to share with you two that particular stood out.

From Debt Reduction:
I was a stock broker in 1987. On black Monday the market was down what 27%. The next day, my smart clients were buying like crazy. I had my best day ever. They knew it was going to go back up. So will this eventually.

From Marci:
I don’t feel like I’ve lost anything yet, as I haven’t pulled anything out yet. It will come back sooner or later. I can retire in 6 months or in 6 years – no hurry on my part as long as I am getting this free company health insurance with a 33 hr week 🙂

It’s only money. The worst that could happen is that I lose it all. I’ll still be ok. My house is paid for, I am debt free, and I need under $400/month to survive on a bare bones budget, if I stay healthy.

With that kind of debt free peace of mind, I don’t worry and I don’t stress. I am more concerned with spending quality time with my grandkids and enjoying whatever time I have teaching them the skills they will need to survive financially in this world.

PS – since this has started, I have bought more stocks and upped my 401K contributions. My way of hopefully coming out ahead later on.

Like everyone else, I saw my stock portfolio take a dive this past year. It was disheartening at the beginning, but I’ve since change my view on this because I know that the values will come back up. I know that if I keep investing, I will come out ahead.

I have:

  1. No debt
  2. Enough Income to take care of my expenses
  3. A solid emergency fund
  4. A lovely family

For those that are really worried about the stock market, step back and think about all the so called “standard advices” we’ve spoke about on this blog.  It’s times like these that having that emergency fund, low debt, and being able to live frugality come in handy.  Those things might not be the most efficient ways of increasing our wealth, but they allow us to sleep at night when times are tough.

Take comfort in knowing that it’s never too late.  Start that emergency fund, see where you can spend less money and remember to stay positive.

Not Caring About the Wild Stock Market Swings

by David@MoneyNing.com · 21 comments

The up and down of the stock market


We witnessed a very crazy day for the stock market yesterday. The DOW plunged 800 points only to come roaring back to close down 370 points. It was breathtaking for many of us because we were glued to our TV (and computer screen) as the stock market kept on going down but for some of us, it didn’t really matter because our focus was on other things.

Yesterday, I was extremely busy at work. I was so busy that I didn’t have time to check on Yahoo Finance nor did I have time to talk to my coworkers about the stock market. When I finally sat down and looked at how the market was doing, I saw the headline (DOW plunged 800 points and closed at 370) on the homepage. My net worth probably plunged just like any other 350 point down days, but it didn’t matter as much to me.

I wasn’t emotionally upset this time because I wasn’t “living” the roller coaster. As a result, it hurt my wallet but didn’t hurt my feelings. I felt much better and saved myself from much of the emotions of a down day just by focusing on other parts of my life. I wasn’t thinking about the stock market nor was I worrying about the Cisco (CSCO) shares that I owned.

I was living my life and not being controlled by the stocks I own. I felt good. In this type of market, maybe you should try it too.

How did you spend your day yesterday? Did you even know that the stock market plunged? Can you sleep at night these days? If you aren’t worried at all, reply and show some encouragement to those that couldn’t.

Another Way I Use Credit Cards to My Advantage

by David@MoneyNing.com · 9 comments

Recently, I started to make bigger purchases around the middle of the month because I found that I can save more money this way.  Most of you are probably a little puzzled by what I just said so let me explain this a little further.

Credit cards have a statement date where they will calculate how much you owe with the due date usually a couple of weeks later. A few weeks ago, I finally realized that if I buy something after the statement date, I won’t really have to pay for it until 50+ days (almost two months) later. Let me give you an example to illustrate.

citibank credit card statement

As you can see on the screen capture, my last statement date is September 10. If I bought something on September 11, the charge would be on my October 10th statement and I wouldn’t have to pay for it until the end of October.

So Why Is This Useful

  1. The obvious is the extra interest that I gain from doing this.  The dollar amount is not that much, but I’m quite happy getting what would seem like free money.
  2. Furthermore, not allowing myself to buy something until the middle of the month is actually a great way to stop splurging.  One of my biggest money leak is impulse buying.  When I want something, I seem to flip on my “passion switch” because I would be thinking about it constantly.  I would convince myself how much I “need” it and then I would finally convince myself to buy it, only to let it sit on my desk collecting dust after a few weeks (sometimes a few days).  Now that I’m not allowing myself to buy anything expensive until the middle of the month, I give myself time to think about my purchase and I end up not buying most of the items that I want.

Oh I wish I found this trick long ago.  I hope that you too will benefit by spending less and keeping more.

Are You Worried About Your Job?

by David@MoneyNing.com · 9 comments

Never mind the stock market, never mind the oil prices and never mind whether the government buying mortgages is a bailout for Wall Street or a rescue of Main Street. At the end of the day, the most important contributing factor to our individual ability to live comfortably is having our job.

Today, I want to ask you: “Are you worried about your job?”

I’m not saying that the oil prices or the passing of the bailout bill isn’t important, but there is no question that our job is more critical to us than either of those. These days, I see so many people focused on how the DOW is doing or trying to find the newest update on the rescue bill instead of concentrating on their jobs, but their attention is clearly in the wrong place.

No matter how bad the stock market is doing or how weak the economy is, you will do fine if you have the same job as long as you didn’t over leverage yourself.

There is a huge opportunity for you to shine because you can really stand out as someone who is optimistic and energetic while everyone is worried and stressed out. Start showing everyone why you deserve to move up in your company and get a raise.

At the very least, promise me that you won’t worry too much and end up getting fired for lack of performance okay?

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