Finances and the stock market for the rest of us

14 Jan

Over the past three months, I’ve been meaning to come back here and talk a lot more about knitting – and I will get back to that, for sure!  (See end of post, OK?)

In the mean time, I’ve been thinking and talking a lot about personal finance, and beginning to get serious about learning about the market and keeping tabs on what I need to know.  I thought I would share a few simple points here for a general audience, such as my friends and colleagues who usually look at me with a blank face when I bring up the market or investing or retirement.  Hopefully you as that audience will keep in mind that I am just a layperson reading my magazine, tracking updates online, and listening to podcasts.

Correction or bear market?

The main thing I’ve learned is that right now, the market is in a corrective phase, which means that people and corporations predicted much higher future values of companies and commodities than have actually been born out.  Now, the market is adjusting itself downward to reflect the true value of many of these stocks.  If it stabilizes around a 10% loss, it will be termed a “correction.”  If the market continues to fall toward 20%, we will hear economists and commentators talk more about a “bear market.”

I just learned that we are a couple months shy of what is considered a very long “bull market,” almost seven years, with unprecedented highs and increases in overall numbers of shares purchased.  So it should not be a shock that some adjustments are now in play, particularly given global volatility, including in China.

Playing it safe

Because continued volatility is anticipated for 2016, I’m hearing and reading a lot about putting investments in cash or cash equivalent funds to ride out the market’s downward trend.  This could be a money market account, a short-term CD, or a short-term bond fund.  I have just moved around 60% of my total investments into money market accounts, and I’m considering moving the rest.  With my retirement accounts, which include an employer-sponsored plan and a Roth IRA, there are some restrictions in movement.  I’m not forbidden from taking funds out of the money market accounts and putting them into new funds, but I am forbidden from putting that cash back into the previous funds for one month.  This doesn’t worry me, because I think we’ll be seeing volatility for some time.

I’ve recently seen a ~9% downturn in my investments, so I want to halt the loss at that point.  Overall, I’m confident that I’ll regain that money, but I don’t want the loss to continue to 20%  before I have a chance to see the market turning around.  Given my age (late 30s), most of my investments were still in relatively high-risk funds.  So, I’ll sit on cash until the signs point up.

What are bond funds and why do I care?

One really important point, especially for older investors, is to consider and reduce how much of your money is invested in bond funds.  I’ve been hearing and reading about this on various fronts, including in a Suze Orman book published in 2012, so it is not a new concern.  Even I have been socialized to assume that bonds are “safe,” but “bond funds” are not the same as bonds.  The only recommended investment that I’m hearing about now is in short-term bond funds, and only if an emplooyer-provided retirement fund doesn’t give us money market accounts as an option, because otherwise there is a significant probability of loss on investment in longer term bond funds as interest rates rise.  We are finally seeing the Fed indicate increases in interest rates, so it is pretty much a guarantee that you’re set up for future loss if you have substantial investments in bond funds.

[My brain has not solidified the “why” of this argument, but I’m sure there are lots of online resources that can explain it.]

The other really important point about bonds is that if you continue to invest, in addition to looking at short term bonds, high quality is essential.  High-yield is not the same, and basically means that the price of those bonds is falling – which, if you do the math, means you’re going to be losing.  (The price is lower, and the earnings may be stable, so when you divide the earnings by the lower price, the yield comes out higher.  This doesn’t say much about the overall value of the investment, which could be plummeting.  One source said that “high yield” is simply a way of saying junk bonds.)  High quality bond funds usually explicitly have “high quality” in the title.  They may have a lower yield, but are overall a safer bet because they are stable.

Don’t take the easy way out – do a tiny bit of research

I found out that I was invested in bond funds through my “Target” retirement fund.  It’s worth making the effort to find out what is included in these packages of investments with an attractive title that are easy to plop our money into without thinking.  I’ve already taken 75% of the money that was in my “target” fund out, and put it in cash, and may do the same with the remaining funds.  When the market turns around, I will probably still look to be well-diversified through an easy “fund” investment, but it may be one that represents the overall stock market, like S&P 500, rather than one that is sort of hiding bond fund investments from me through my own lack of research because I wanted the easy way out.

I’ve gone on for a while now, but this is really essential stuff for anyone that works and puts their hard-earned cash in any investment, i.e., somewhere that isn’t only a savings account at the bank.  We need to be informed enough to preserve those investments and protect our future to the best of our ability.

The Knitting Portion of the post

Now, knitting porn:

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Washcloths made with Fibra Natura Flax yarn, to go with holiday gifts of locally made soap and lotion.  I like to stick with stockinette stitch, because it doesn’t feel as rough on my face as some other stitch designs involving purl bumps.  But I tagged them with a little cable design in the corner.

Shwook

8 Oct

Generally speaking I am not on the cutting edge of the new patterns that come out.  Occasionally I will finish something within a month or two of its release, but that is very rare.  This hat is not an example of one of those rare occasions.  “Shwook” came out in honor of the 2014 Shetland Wool Week event, so probably all the other Shwook knitters posted their goods long ago.  Lately Ravelry has been filled with the new 2015 pattern, which is adorable and features sheep.

I am thinking now that I should have looked up what a shwook is before posting this.  Any guesses?*

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This hat is using overly-long-stashed yarn in colors that probably went out ten years ago.  At one point, I had an online sale problem and purchased yarn willy-nilly with no project in mind.  In time, with experience and a non-shrinking stash, my habits have changed.  But this yarn was still hanging around: Rowanspun 4-ply, in Sugar, Stone, Squirrel, Temptation, and Turkish.  The yarn was thinner than required, but the end result is a perfectly-fitting beanie.

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I think this is only the second stranded hat I’ve completed.  And it’s definitely the first time I’ve blocked with a dinner plate.

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How do you like that?  Makes the center cap portion look mighty fine, if I do say so myself!

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More specs on my Ravelry project page.

I have almost 600 yards of yarn left (of around 810 total), so I’m now making a garter-stitch shawl that I’ll edge with feather-and-fan.  I’m using the lighter colors for the main garter triangle, and the purples for the edging.

* OK, my curiosity got the better of me and I consulted The Google.  If you want an answer before guessing, visit this link

Still knitting

7 Oct

I’m thinking about making a blogging comeback.  My last post here was over three years ago, and I miss writing and interacting in a deeper way than is possible through Ravelry.  My Facebook interactions are of a different nature, not really the place I feel comfortable waxing poetic about animal and plant fibers or cable and lace designs.

In the interim, many things have happened.  I met my husband; reorganized my life to go back to the international health focus I had recently left behind; moved to a French-speaking African country with him and his daughter, found out he was a narcissist (you may not have any idea how scary this can be – just click on any one link from a google search…), and struggled to separate my life from him while finishing an overseas contract.  The day-to-day of getting through life has meant a lot less energy for maintaining my blogging presence or social media contacts.

But I’m about to leave all that behind and relocate back to the U.S.  And I have missed posting here and carrying on discussions with you all.  Many of you may have moved on to Facebook and Ravelry forums, but I for one think the blog has some staying power and offers different opportunities for sharing and exploring.

Plus, I am definitely still knitting.  Of all the coping mechanisms to get me through relocating internationally (and returning), trading the single life for a nightmare marriage (and returning), and a generally high-stress professional situation, it is the meditatively healing qualities of a good knitting habit.  I can’t say I’ve been a great finisher, but I have maintained a steady increase in starting projects, learning or solidifying techniques, and I have also been teaching my neighbor to knit.

I’ve also tried some new yarns, and done a bit of dreaming, sketching, and designing.  One of my goals for the coming year or two is to complete the many half-baked designs in my sketchbook and knitting basket.  I would love to share some finished patterns with the world.

To leave you with some appropriate eye candy, a melange of African sensibilities and knitted design, here are a couple of photos of musician Stromae’s line of knitted clothing in graphic designs inspired by African print cotton cloth.  I guess this isn’t cutting edge news, but I’m into it!  Click to see larger versions.

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Smothered in hats. I mean love.

27 Jul

This post is not meant to be sad, but it is a result of my aunt recently passing away. She struggled with cancer for a couple of years, and was very brave in the face of the odds. I was away during much of this time, and all I could do was support her via email. And knit her things. I made her a purple lace shawl, and several hats. In fact, I did not realize how many hats I had sent her until I was up at her house this past month and came across them all. If you can represent caring and love through knitting, I loved her this much, and more.

Carrboro Craft Market – my first public appearance!

23 Jul

On July 14th, I participated in my first craft market ever – it was fun to run around getting ready, visiting local thrift shops for display ideas and items. I picked up a wooden sliding door with slats from Habitat for Humanity’s ReStore, and some metal cubes from PTA Thrift, and I was on my way.

Thanks to Pinterest, I received a lot of comments on my business card display, which was fanning my MOO photo cards around a slinky. Great idea, whoever was responsible for that one!

The craft market took place this month at Open Eye Cafe, where it will also be on August 11th. We had some decent foot traffic considering it was a VERY hot day, and thanks to my friends that stopped by to support me! I had a few friend sales and a couple of stranger sales. Hopefully next month will be even better, with more vendors and more of the community out and about!

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(Mel makes a guest appearance… checking out my African print cover journals!)

I also met Meli and Gina, fellow local Etsians, for the first time – Meli had a blog post up the day after!

African fabric collecting

27 Jun

More and more I feel excited to come home after being away. Traveling can be exhilarating, even to a place I already know, like Kinshasa. At the end of the day, though, I like my creature comforts, my routine, my home.

One of my goals while in Kinshasa these past few weeks was to collect some more African print fabric. This time, I visited three main places. One is a narrow alleyway near the Beach, which is the spot where all of the boats from Brazzaville (across the river), barges from up river, and vessels from Matadi (the main ocean port) land when they get to Kinshasa. The women selling the fabric in the alleyway must have first pick from vendors off the boats. My favorite find there was this lovely lavender and gold design.

Another pricier spot is Woodin, which has similar quality cloth but a sleeker and more coordinated selection of designs. They have a storefront a few blocks off of Kinshasa’s main boulevard, 30 Juin. Next door is Vlisco, which makes amazing fashion primarily from African print cottons, but is generally way out of the price range! This is a print I brought home from Woodin, in a similar color scheme as above.

We also drove down to the crazy and action-packed Avenue du Commerce, which you can imagine is the downtown center of commercial activity. After “honing in on it” for a while (my expression when I don’t know the exact location of the destination…), we finally located the Utex factory store, called Lambada. I love the strong, bright colors of many of their selections, such as this abstract floral.

But I will admit that some of my favorites are those you wouldn’t imagine wearing on a shirt or dress, such as chickens and spark plugs! (Not together…) The chickens will make a super shirt for my friend Ezra, who has grown out of the first one I brought him.

Ideas to Action

3 Jun

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More and more I find myself discussing with friends online ways in which we can interact and structure our time around supporting each other’s creative and business endeavors. 

When I am not under undue stress from work and life responsibilities, my mind is a fount of ideas. The challenge I face is how to bring those ideas to fruition, how to lay out a plan and organize the work. I am constantly saying, one day I’m going to make a film, write a novel, build an installation project. The ideas are there, but the structure and accountability is not. 

Several methods we’ve identified recently that I think will motivate and give the proper push from idea to action include:

  1. Establishing a weekly meeting time to work on individual business activities with a like-minded friend. 
  2. Scheduling a weekly virtual writing group to alternatively write at the same time for 1-2 hours, checking in on FB/Gmail/Skype, or to vet our work with the group when we’re ready for critique. 
  3. Starting an Action Cafe like the one Claire Mulvaney describes. I love the notion of a semi-formal but mostly informal space for sharing ideas and challenges, and soliciting potential solutions from a group of relaxed creative thinkers. This approach can involve some gentle structure, such as brainstorming on giant paper with bright markers, giving the beneficiary something concrete to take home and work from. Unfortunately, it looks unlikely that I’ll be able to join the Action Cafes taking place in Ireland any time soon, but perhaps I will work to evolve one in my neighborhood!

What ideas do you have to evolve from ideas to action? 

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