My Reaction to the Financial Crisis So Far

I'm keeping a close eye on the stock market. I handle retirement accounts for myself, my mother, father, stepfather and husband. It's pretty ugly out there now!

Luckily, my own 401(k) had been almost entirely in cash by early this year. I didn't like any of the funds, so I've just been parking the money. Thank goodness.

Spread across the other accounts, I had some positions in inverse ETFs that go up when the stock market went down. Those are all sold as of today at high profits, so the accounts have some cash. Right now, I'm planning on 1) waiting until the battered positions come back up again in about three to five years... as long as we have an Obama administration, that is, because with McCain we might be a nuclear wasteland by then 2) waiting until we hit bottom so I can start buying again. Ultimately, this is probably going to be a good buying opportunity.

I know a lot of people are just not looking at their retirement accounts right now because they don't even want to know. All I can say is, face it and take control, it will make you feel better. Get rid of what you need to get rid of, and try to adopt a long-term outlook.

I'm sanguine when it comes to doomsday scenarios. I believe in keeping your eyes open, thinking about the worst and best that could happen, but going about your daily life as if everything is not about to fall apart. Not that I believe things won't ever fall apart, just that if they do, the stock market, cash and even gold is not going to protect us. Nothing will. I'm just a fatalist, not a pessimist or an optimist.

I've been watching some financial news clips at home. I usually don't, because the signal-to-noise ratio is so low. For example, this morning I was trying to get some information about who is going to have it worse over the next couple years, America or Europe. I ended up with a bunch of pundits going off on a completely irrelevant anti-socialist rant.

I actually love reading socialist perspectives on the global financial system. I'm a leftist with an MBA, after all. I've actually read and studied the first volume of Capital. I'm more of a progressive Democrat faux-Socialist nowadays, but I can appreciate the more radical critiques you can get at places like Lenin's Tomb.

I know this may seem odd for an investor like me to say, but individual investing is a terrible way to prepare for retirement. I don't believe in 401(k)s from a policy perspective because they're way too complicated and risky for the average person, especially given the pathetic state of financial education in this country. I feel really terrible for the retirees who are depending on income from their accounts right now. We need a lot more regulation: smart regulation, not worthless stuff like short selling prohibitions. The financial sector is kind of like a brain-damaged cow. It's very large and powerful. You need it for milk, but if not watched very carefully, it might try to eat your shirt or collapse on top of you.

I don't much to say about the bailouts, except that they're probably a bad idea. I don't know enough about economics and finance to advocate for better solutions, though.