Money To Live

September 1, 2008

Follow the news?

Filed under: retirement,savings,taxes — by moneytolive @ 5:00 am
Tags: , , , , ,

I recently had a conversation with a friend about reading financial news. She said it was not worth reading the news; she has an investment plan and sticks to her target asset allocation.

Generally, I agree that it is a waste of most people’s time to follow financial news on a daily basis. There are several things going on right now, though, that I follow in the news.

This is what I am paying attention to now.

  • Home heating costs
    Last year I spent twice as much money on oil for my home (around $1,000) as gasoline for my car (around $500). At my old apartment in New Jersey, a giant oil tank in the basement was used to generate hot water and heat in the winter. Each time the tank was re-filled, I got a bill for at least $600. With higher oil prices, these re-fills will cost even more. For example, in New Hampshire, “retail heating oil costs about $4.50 a gallon, up from $3.30 last winter.”
  • Nearing retirement in a downturn
    I care about this topic because my parents are in/near retirement (my father is retired, my mother is still working). There is compelling advice to near-retirees that it makes sense to work longer, giving retirement accounts time to bounce back before withdrawals begin. (NYT)
  • Changes in the tax law
    Specifically, changes in capital gains tax, the Alternative Minimum Tax, and limits on retirement account contributions.
  • The housing market
    I may (or may not) buy a condo in the next few years. If prices decrease significantly in the DC area, I probably will buy. (Washington Post)
  • Which Wall Street firms are closing
    Since I have friends on Wall Street, I am curious about how the major companies are faring and who is planning lay-offs. (

There are some things I am intentionally not paying attention to.

  • 529s/ ESA
    I will most likely not have children within the next few years, and when/if I do have kids, I may live in a different state. Also, these accounts have only existed for a short amount of time. If the laws change, it may not make sense to use these anymore (or it may make more sense)
  • News about “hot” funds/sectors/stocks …
    Here I completely agree with my friend — follow your asset allocation and ignore the market fluctuations.

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