Posts filed under ‘investments’

Lucky Timing: A $32,000 Loss If I Held On

Stock Price

The company I previously worked for often rewarded employees with stock and stock options. When I joined the company in 1999 coworkers told stories of company bonuses that averaged $15,000. They told me one day everyone drove to work in beat up old cars and one week later the garage was filled with sparkly, new SUVs.

During my time there the overall stock compensation dropped, but I was the benefactor of quite a few solid performance reviews which almost always resulted in additional shares. Actually stock came to employees in many forms. There was an ESOP, (Employee Stock Ownership Program), an ESPP (Employee Stock Performance Program) and general compensation for performance in the form of stock options and restricted stock.

For years the company stock seemed like a sure bet and many employees held onto every share the company ever offered them. Employees never talked to each other much about this until the stock price significantly dropped. Then coworkers suddenly began whispering about just how much money they lost over the course of months, weeks and days. It was commonplace to find my coworkers hunched over yahoo finance pages typing in ticker symbols and looking at falling graphs.

I switched between selling my stock as quickly as I received it and holding onto it, so unlike a lot of my coworkers I didn’t have thousands of shares tied up in the company. In fact, as luck would have it I sold the majority of my remaining stock holdings in 2005. The stock was no longer at it’s peak, but I managed to sell roughly 600 shares for $33,000. Today that same stock would value at just over $900.

I used that money as the basis of a down payment for my beach house and never thought twice about it. I didn’t own much stock, but I certainly lucked out in when I decided to sell it. Unfortunately some shares of stock were tied up in retirement accounts that employees, like myself, were unable to touch. I don’t remember how much money was in that account at the peak, but I imagine I easily lost between $10,000 and $15,000.

I feel bad for the employees who held so tightly onto their stock. A lot of them worked at the company for 20 years and watched their retirement savings dwindle down to a few thousand dollars.

Actually, if I hadn’t purchased my house in 2005 I’m not sure that I would have sold the stock myself. I guess I just lucked out in the timing of it. Holding onto that stock would have resulted in at least a $32,000 loss.

October 11, 2013 at 4:25 PM 2 comments

$600 Richer

As I mentioned a few days ago I am currently in the process of rolling my 401(k) into an IRA. My employer instituted a Roth 401(k) a few years ago, so some money will roll into a Roth IRA and the rest will roll into a traditional IRA. To be more precise roughly $100,000 will move into the Roth and $175,000 will move into the traditional account.

I planned to move the money to Charles Schwab, because that’s where my husband and I keep all of our accounts. In fact, we gave me up traditional banking years ago and haven’t looked back once since.

Well it just so happens that Schwab is offering a bonus to anyone who rolls a 401(k) into a new or existing IRA from now until April 17th. The bonus amount paid is tied to the amount of money you plan to roll over.

In my case since both accounts will be over $100,000 Schwab will deposit an additional $300 into each account. Given the amount of money I’m rolling over it’s certainly not much, but since I’m moving the money anyway it certainly doesn’t hurt.

January 26, 2012 at 4:10 AM 2 comments

Failed: We Won’t be Purchasing a Vacant Lot After All

I’ve spent the last two days looking over every nickel and dime in our bank accounts, determining exactly how much income we bring in on a monthly basis, (my husband is a contractor so income fluctuates), and figuring out how to cash out investments in an effort to collect a down payment.

After making sure that all of the pennies and cents added up my husband and I had a long conversation and decided to move forward with the purchase of a vacant lot in North Carolina. I called the real estate agent this morning with the full intention of submitting a bid. Unfortunately, less than thirty seconds into the call I was told the lot had already been sold. Apparently the property was foreclosed and the vacant lot went up for auction sometime earlier this month. I was shocked that the lot had already been sold, because the realty sign is still on the property and address is still listed in the MLS.

My husband and I have been thinking about this lot for over a year. When it was originally listed it was completely out of our price range. Not only was the purchase price overly inflated but our brokerage accounts had been slashed by the recession, so it would have been impossible for us to splurge on the purchase.

Buying a new property is always unbelievably exciting and a bit frightening all at the same time. There is an incredible amount of excitement in making the purchase and yet unbelievable fear that we haven’t double checked all the numbers and that something or other would make us default on the property. I spent a lot of time over the past two days running the numbers to make certain we could afford the property and I am hugely disappointed that the lot has already been sold.

This time it seems we missed a golden opportunity. The lot was sold at auction for $100,000 less than the listing price. If we had known about the auction my husband and I would have been there in a heartbeat. It’s one of those once in a lifetime bargains that we may never see again.

We are both very disappointed, but we can’t change the course of events so we have to learn from our mistakes and move on from them. In the future if we are interested in a property we will contact the real estate agents and make certain that they are aware of our interests even if we don’t immediately make a bid.

In the mean time we will continue to save money in the hopes that other opportunities will present themselves. They may not be as good as this one, but hopefully my husband’s dream of owning waterfront property will eventually come true.

October 16, 2009 at 2:15 AM 3 comments

Target Asset Allocation: Moderately Aggressive


I can’t seem to avert my gaze from the balance on my retirement accounts. I know that I’m young and that I have plenty of time for the market to regain speed, but I am still amazed to see thousands of dollars wiped out of my accounts in a matter of days.

My husband and I are still contributing to our retirement accounts and we haven’t changed any of our allocations or sold any stock or mutual funds. We’ll hang in there and wait until the market rebounds, which it is inevitably bound to do.

As I look at the decreasing balance I can’t help but think of a financial advisor I met with a year or two ago. He said a lot of individuals invest too aggressively. He said most investors think they can stomach a very large storm, but in truth very few can bare to see their hard earned dollars dwindle before them.

He tried to convince me to think about paring back our holdings. He wouldn’t give me any specific information on stocks or mutual funds unless I paid him, but he did tell me too think long and hard about targeting a moderately aggressive portfolio. He said, “what if you saved $1 million and then watched it shrink in size by half”.

Well we don’t have a million dollars in our accounts, but I will admit that it is harder to watch those accounts shrink then I thought it would be.

October 9, 2008 at 10:45 PM 4 comments

Restricted Stock Takes a Beating

Four years ago I was awarded $12,000 worth or restricted company shares. The stock shares vested over a four year period, which means every year the ownership of roughly 40 shares of company stock was transferred to me. The shares that had not vested continued to earn dividends and those dividends were paid out during the four year period. Four years later the stock is now fully vested but the shares are worth roughly 30% of their original value. So rather than owning $12,000 worth of company stock I own roughly $4,000.

Still I’ll take $4,000 worth of shares plus accumulated dividends over my worthless stock options any day. Stock options provide employees with the opportunity to buy company shares at a future point in time at a preset price. When the stock price rises the employee wins. When the stock price falls the employee loses. My stock options are beyond worthless.

Although I’m happy to receive something over nothing I will admit that $12,000 back in 2004 is a whole lot more impressive than $4,000 today. Will my company stock reach the 2004 price any time in the near future? Oh it’s very doubtful, but eventually it will recover at least some of it’s lost value.

February 27, 2008 at 4:01 AM Leave a comment

Turbulent Times Ahead

As you wait and watch the ever so turbulent stock market sink lower and lower, keep Warren Buffet’s words in mind… “Be fearful when others are greedy and greedy when others are fearful.” For now, I’m holding tight in the market. I’m not buying or selling, but if prices continue to fall I might begin the search for bargains.

January 23, 2008 at 2:10 PM 3 comments

Investment Decisions in a Falling Market

Walter Upgrave provides some solid advice on investment portfolios in today’s unpredictable market. He tells a worried 34 year old investor that 20 and 30 year olds should not be greatly concerned by the falling market. In essence, he points out that individuals within this age range have more than enough time to recover their money and that these investors have a great chance of boosting potential returns by purchasing shares at lower prices.

In short, Upgrave proposes either an 80/20 mix of stocks/bonds or a 90/10 mix depending on your personal aversion to risk. He recommends the 90/10 mix only if you can truly whether the storm of a down market, otherwise you are bound to pull your money out when the market dips. He writes:

If you’re really cautious, you can pare back your stock holdings even more. But you don’t want to wimp out and go much more toward bonds because then you reduce the chances of building a nest egg large enough to support you comfortably in retirement.

The article also discusses investment strategies for those in mid-career, nearing retirement, and even those who have already retired. It’s such a great read I’m forwarding it on to my dad.

You can check out the entire article here.

August 30, 2007 at 5:04 PM 1 comment


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