Wednesday, September 24, 2008

Are you the only one losing money?

To stay or to run?
Even the financially smart are finding the going tough in today's vacillating market. If your portfolio is hurting - at least you are not alone. Here are some interesting examples
"It's my toughest run in 10 years, we missed the turn in the market, there's nothing fun about it. It's like mashing all your fingers in the door... This has been a pretty bad period for us," - T. Boone Pickens, billionaire oil magnate

Peter Lynch, the celebrated former manager of Fidelity's Magellan fund, singled out Fannie Mae many times over the years as a favorite stock. When the end came, he says, he still held it in his own portfolio because he believed it would post big earnings in 2011. He also owned AIG.

"I can be just as dumb as anybody else," he says wryly.

Warren Buffett's Berkshire Hathaway said that first-quarter profit tumbled 64 percent, hurt by $1.6 billion of pre-tax losses tied to derivatives contracts.

The only upside to all this turmoil is an opportunity to reflect on your risk tolerance. An opportunity to assess what you are comfortable with and what you would rather avoid. Are you willing to feel the short-term pain for the longer term gain? Are you ready to invest in the market? Is your asset allocation model working? And finally - can you sleep at night?

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