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Before I get started. Scooby Doo has thread posted called "RV still aways off" that I consider a must read. It helped me regroup my thoughts and reflect the reasons I invest in the first place. Now the story. It starts with "Once upon a time".

Once upon time back in 2005, in a booming economy, I knew this guy with great job and a 401k to die for. The word "Recession" was being broadcast more and more over the news. About the middle of 2006 the word "Recession" was used more and more. This guy sold his house, collected his equity, and moved to another state for a better job and took his 401k with him. Everything was still looking great! In 2007 he decided to buy a new house at his new location. Why not, he had a great job, a rolled over 401k, and a great stock investment with his new company. Everything was now in place for the perfect retirement plan. In 2008 all hell broke loose. There was little forewarning even though all the signs were right in front of him. That "Recession" word was now reality and the market was falling apart in front of everyones eyes. Greed and corruption had taken its toll. By now this guys house is worth a third of it's original price, his sacred 401k took a 50% decrease in value and his company stock once valued at $98.00 per share now trades at $8.00. Now what, not looking so good here.

This guy has since been layed off and running scared because many others are in the same boat. After many hours on the internet looking for solutions, he's lead to two areas of interest, the dying stock market that he put so much faith in and all this "Hoopla" about Dinar. It was time to do something before things got any worse.

Against his brokers advice, he took what was left of his 401k and cashed it in with heavy penalties. Now working without a broker, (not much of a broker if you ask me) he bet it all on two race horses, a failed company called "AIG" and a high risk investment known as the Dinar. AIG was now a penny stock and $100,000,000 of these Dinars was pretty cheap as well. This guy accepts the fact he's in it for the long haul in hopes of some kind of recovery.

Who would have thought that AIG is trading a little over $40.00 a share today and has hit highs in the $60.00 range. How long will it last? I don't know. Race horse #1 came in first place on this one. Race horse #2 is currently in the lead. Not so sure how long the race is going to be. "Money" and "Risk" should always be used in the same context. Have faith in your investment, you just never know.

No one knows for sure the outcome of this thing. I do know the outcome if you're not invested and it does go down right. It's an individual choice. Have a great 1!

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Interesting point.

Slay, I must mention though, that it is no one's fault that he lost 90% of his 401k. He should have known his asset allocation in his retirement and how they were performing.

I believe they send out statements atleast quarterly.

Him cashing out his 401k in panic-mode is exactly why investors lose money and never gain back. Making such decision based on emotion is sure road to failure.

I too, lost over 20% of my portfolio. 20% during 2008 wasn't so bad...but I did my homework and was well diversified. And now, I'm well above 20% of my portfolio just from last year.

You know what I did?

I held onto my portfolio, shifted some assets around, and bought even more when Dow hit 6000. It's all about not letting your emotion get in the way, and having a disciplinary approach.

Had he held onto his shares, his account would have recovered and most likely in the positive earnings. Had he done his homework, he wouldn't have been overweight in

a certain sector, and would have been more diversified.

No one can predict the market, and even today the odd-lot theory still holds water for many investors. Odd lot theory is "buying high and selling low".

Over 80% of investors make this mistake because panic runs deep when markets start to tank.

It's much easier to hedge earlier and keep a moderate to balanced portfolio at all times. Do not try to time the market to win, you WILL LOSE.

And if you're skeptical, stick to key municipals like sewer, school districts, parks, and stay away from Revenue Muni unless it's an essential one.

You can make great money in the market, however you do need patience, and resilience.

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Your're absolutely right! I'm sure he's a lot smarter these days. You know the old saying, "You get hit by a bus and survive, "you look both ways next time". Thanks.

Your're absolutely right! I'm sure he's a lot smarter these days. You know the old saying, "You get hit by a bus and survive, "you look both ways next time". Thanks.

Opps! Sorry about the double.

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