Skip to content

July 30, 2012

“Lessons to bear”

John Wasik, a journalist for Reuters, article in the July 29th Chicago Tribune discussed some lessons he has learned.  His experiences include; speculation in alternative investments, buying and selling at the wrong time, following the crowd and other efforts that resulted in losses. 
The first lesson he discusses is the value of liquidity.  Being in a position to pay for the unexpected expenses such as health care avoids the need to liquidate assets when they are depresses can be costly.  When the reserves are depleted, they need to be built up to a reasonable level.  He highlighted that his reserves are in federally insured accounts and bond funds with short term bonds.   That is, reserve funds should not be subject to the risks of fluctuating values.  For long term savings he tries to find a tax favored vehicle such as low-cost 529 college saving plans.

Next the article discusses the uncertainties relating to Medicare and social security.  Most discussions relate to reduced benefits from these programs.  Future retirees will need to have more savings to pay for future health care costs.  This increases the amount that will need to be saved.
He also is rebuilding his portfolio that does not follow the S&P 500 large stock index.  This should reduce the amount he expects to lose in the next down market.

He is striving to learn more about investing and measurements of risk.  Another area he is concentrating on is global developments and changes and their consequences.   That is, he is increasing his human capital to improve his financial investments.
His article can be used as a primer for starting a plan to help his readers us money to allow the reader to get to where they want to be.
Read More

Back to Top

Read more from Investing & Savings

Share your thoughts, post a comment.

You must be logged in to post a comment.