Jim Cramer just threw in the towel.

[randomness]

It might be time to buy. :)

From http://gawker.com/5059535/jim-cramer-begs-america-to-abandon-hope:

Whoa, Jim Cramer has fully turned around as much as a man can possibly turn around! The shouty CNBC (poor) stock picker—who as recently as last November was trumpeting "10 Reasons to Be Bullish" ("1. The stock market is cheap")—went on the Today show this morning to virtually beg Americans to pull all the money they might need in the next five years out of the stock market, no matter what the cost. He looks like he's about to cry. This will be one of the defining moments in the media narrative of our nation's impending financial doom.

Comments

[n5red.livejournal.com]

I have a few buy orders in. Things will have to drop significantly further before they trigger. It will be interesting.

[cerridwynn.livejournal.com]

So i've been meaning to do something with the money my grandma left me for about 1 1/2 years now (it's been sitting in a cd and is now in a money market...)

It seems like, at least in the short term, my procrastination/cluelessness has paid off.

I still need to figure out what to do with it but i still have no idea.

[digitalemur.livejournal.com]

What do you want to ultimately do with the money? Right now it's probably getting a nice little return so there's no rush to find something to do with it.

[cerridwynn.livejournal.com]

Well, right now it's probably making about enough to keep up with inflation, but maybe not much more. Eventually i want to use it as (part of?) a down payment for a house, after putting some in an IRA (which procrastination and cluelessness has also kept me from doing...) I just keep hearing about the market being so down and think, this would be a good time to buy. Wish i knew how to go about doing that!

[meepodeekin.livejournal.com]

I think it's only a good time to buy if you qualify for a mortgage on pretty strict terms. The old "no income documentation" and "5% down" days are on pause.

You can apparently put IRA funds into guaranteed accounts if you go to certain banks. You might look into that--even if it doesn't make any more than it does now, it should be in the IRA account as soon as feasible because of the annual contribution limits. If you let a year pass without a contribution, that chance to put it in is gone forever.

Sorry to butt in. I was just talking to my mom about IRAs--I said I was sitting on this year's funds because of the state of the market and she (is an accountant and) said that there are insured ira funds out there.

[cerridwynn.livejournal.com]

Oh, i didn't mean buy a house! (I'm just finishing grad school and don't know what i'm doing with my life!!!)

No, i meant buy stocks so i suppose i should have said "invest". See how clueless i am!

And yes, i know i need to put money in an IRA (specifically, i'm told, a Roth IRA). I just really don't know how to do that, or what investments are safe. But it's nice to know there are safe IRAs out there -- i'll certainly look into that when i get a chance... I felt really dumb, missing the deadline last year.

[holmes-iv.livejournal.com]

So, quite apart from what's "safe" (from the guy who finally got off his procrastinatory butt and put his Roth IRA into equities... two months ago...), you do want to put money in a Roth ASAP. You can probably leave it in a cash-equivalent account when it's in, depending where you put it, but there are annual contribution limits, and if you end up taking some back out to help with your down payment, you want to have had it in the account for five tax years, so getting the clock ticking is a good thing. And metagaming aside, accruing tax-exempt interest from now to retirement is a good thing on its own terms. :-)

As to how and where, you can probably set one up pretty easily through your bank if you like your bank, or through an online brokerage (I use TD Ameritrade) if not.

[meepodeekin.livejournal.com]

To back up holmes_iv, it is trivially easy to set up a Roth IRA. Basically all investment companies and many banks offer them, as far as I can tell. I have mine with TIAA-CREF, but I don't know if they still have membership restrictions that would keep you from joining them.

You have until April 15 for this year's contribution, but you should put as much as you can afford to in before then. And you can take up to $10,000 out for free when you are ready to buy a house.

[r-ness.livejournal.com]

One thing I like about TIAA-CREF is that they're very clear about what they invest in. During the recent panic when people were concerned about money market funds investment in commerical paper, there was a lot of talk about how people didn't know what their money market funds were invested in because the funds were being cagey about their holdings.

I was surprised, because all I had to do was download cref_soi.pdf from TIAA-CREF's website to see how much commercial paper CREF's money market fund held. (Quite a lot, actually, which wasn't that reassuring, but at least I knew.)

but you should put as much as you can afford to

Up to the legal limit, which is $5,000 (if you're under 50) or $6,000 (if you're 50 and above). (If you made less than that in earned income, you can only contribute as much as you made in earned income.)

[meepodeekin.livejournal.com]

Yes, thanks for correcting. I was assuming that someone fresh out of grad school had less than $5000 to invest each year, but that could easily be wrong.

I'm happy with TIAA-CREF for their honesty, even when they lose my money. I also had some work retirement money with Vanguard invested more aggressively whose fate I refuse to check on. I can wait until the quarterly statement to find out.

[r-ness.livejournal.com]

You can apparently put IRA funds into guaranteed accounts if you go to certain banks.

I think most banks will do this. Googling "IRA CD" gets you a lot of the big banks, and a bunch of smaller ones.

[babasyzygy.livejournal.com]

Yeah. Cramer has a history of admitting (not exactly explicitly, but he spells it out bit by bit, basically ending up just short of what would get him busted - he even talks about the SEC limits before prosecution) that he uses his audience to manipulate stock prices.

[r-ness.livejournal.com]

You'd find that "poor" link above, interesting, if you haven't seen it already.

[babasyzygy.livejournal.com]

Yeah, I remember when that came out.

The thing that's most memorable to me was at the end of last year, when he listed several stocks (including AAPL) that would be talked up through the end of the year, especially two days before the end of the year, and then immediately sold off two days following the end of the year before the market corrected. He explained that this manipulation was all for the tax consequences of the year end, but that the SEC would come down hard on fund managers taking advantage of these manipulations on the last and first days of the calendar year. Therefore, the same practices had merely shifted anywhere from a day to a week on either side. Sure enough, those stocks peaked slowly Dec 31 and fell slowly Jan 1.

I actually find a lot of what he says to be illuminating, but it's really important to understand that he's doing exactly what he's describing. I would be interested to see a contrast between those who do as he implies vs. those who do as he says.

[drwex]

Fascinating.