Investing for retirement (was Baldwin stock)

Robert Goodale rrg@nevada.edu
Mon, 07 May 2001 10:00:47 -0700


The same goes for mutuals.  I am invested heavily in Vanguard funds, one of the
most highly regarded fund families out there.  I followed the advise of a well
known financial analyst and purchased "Total Market Index", which has generally
faired well except for the past year due to market fall offs resulting in
poorer performance though still generally profiting, "Prime cap", which has
traditionally and still performs generally well even in down markets though not
necessarily a high roller, "Life growth", an IRA designed fund that has had
about the same results as Prime Cap, and then "Windsor II", which performed
tremendously well averaging around 35 to 40 percent for the first year and a
half from when I got in it.  Then this fund took a new direction as it's yield
plummeted to around 4 percent, then 2 percent, and then slightly in the red.
After little change and unforseeable reversal in the relative future I chose to
sell it six months later.  To date I continue to watch it and it has yet to
performed all that well so that seems to have been a wise choice.

Synopsis: Tomorrow's performers can easily become tomorrow's clunkers in a
hurry.  While all investments require patients and should be regarded as long
term, (five years minimum with the possible exception of significant reversals
in performance), one should be checking the quotes regularly for signs of
change.  During a bearish economy as we are currently experiencing  recovery
can require considerable time but that doesn't neccessarily mean it's time to
bail out of that particular investment.  Rolling over into better looking
prospects is sometimes prudent although this shouldn't be done in an emotional
panic.  The market goes up the market goes down, it's the long term results
over many years that is important, and traditionally over the long haul the
market only goes up.  All the more reason to keep a careful eye.  Even what
seems to be a positive new direction after a trade can become a clunker without
warning and require yet another trade.  When it's your retirement we're talking
about, especially for piano techs when most don't have pensions or other back
up sources like a rich uncle with a will, you need to pay attention to the
markets but don't abandon them.  In spite of risks and the need to monitor your
investments regularly, most simply can't afford to not be involved in market
for their retirement.  Savings accounts and CDs are next to worthless as
investments and savings bonds are worse than useless.  If you are NOT investing
see a financial advisor soon.  When it comes to your retirement nest egg time
is not something that can be made up later.  Long term compounding investments
are the ONLY real way to make your money work for you.  Reverting back to
Baldwin, I see it as a very risky investment and not likely to turn a
significant profit any time soon and if it goes belly up then you can kiss it
all goodbye.  There are simply too many better options out there.  When it
comes to your retirement you are looking for what makes money not investments
in a company you "feel sorry for" and dump money into so you can feel better
about yourself.  If throwing money away makes you feel good about yourself then
by all means feel free to pay my taxes.  Then you can feel really terrific.
Long live capitalism!

Rob Goodale, RPT
Las Vegas, NV



toto@fovea.pndr.upenn.edu wrote:

> Regarding Baldwin Piano stock:
>
> Here is what can happen to you when you buy stocks based on "heard on the
> street" news, rumors, and heresay.  I am NOT proud of these fiascos, but
> there may be something to be learned from them.

<snip>

> On the plus side:  My father gave me stock in SmithKlein Beckman (before
> tagamet hit the market) as a dollege graduation gift.  The next ten years
> saw 20-25% annual growth in the value of the stock, more than making up for
> all of my other losses.  So, in conclusion, my record for picking stocks is
> terrible and has taught me that you can't believe everything that you hear.
> Even the great analysts make bad calls.
>
> Be careful out there.



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