Yesterday I had a case of what-if. If we had had the courage and $, we should have purchased last Friday. If we had bought the ETF which contains only the Dow Jones stocks and sold it yesterday, we would have realized 10% gain in one day!
An ETF (exchanged traded fund) is a bundle of stocks or bonds that are sold at a price through a brokerage firm. Vanguard has a selection of 38 of these bundled funds which include sector stocks or varying terms of bonds.
Even with brokerage fees to purchase on Friday and sell yesterday, we would have walked with 10%.
Can't live my life on what-ifs. We will just hang in there for the long ride.
Beyond our own investing, I am concerned about the socialism of banking. In fact, the socialism of debt as well. I have heard "we the people" have helped bail out the automakers and are taking some administrative control over banks.
I am a capitalist and abhor impediments to the free market. I keep hearing how there wasn't enough regulation and that's why we are in the crunch. I would suggest banks and lending institutions as well as Fannie Mae and Freddie Mac were pressured, yes demanded, to make bad deals on mortgages. For years, well over 15, there has been a concerted push and watch dogging to assure the unqualified had debt available.
In helping those who had not yet saved 20% down, "we the people" have broken many hearts and families. Once banks were forced to lower their expectations, greed set in across the board, and people borrowed heavily through adjustable rate mortgages and interest only against first homes. Others upgraded to mega mortgages to get a larger house or took out the equity (borrowing the difference between amount owed and market value) through second and third mortgages to pay down consumer debt, make large purchases and make house improvements.
With the basic supply and demand in place, house prices soared. Equities increased. Construction companies, developers, realtors, and home improvement businesses boomed.
Then the clouds began to gather. The horizon showed gloom. Several voices pointed and demanded change. Some demanded regulating Fannie and Freddie including the Senator from Arizona. No one likes a nay-sayer.
The clouds have engulfed us. Where is the sun? Who will lead the way out? Many quieted voices are declaring throwing more money at it will not solve the valley we must pass through. However, Congress continues to print $ beyond the $700 billion. Loud voices are promising rebates and tax credits and stimulus checks. Even louder are demanding regulation, regulation, regulation.
What have we learned from the 1930s? More and more government or get out of the way and let America's free markets suffer through.
'til later
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