stock market | Online Savings Blog

Using Prosper to Diversify in a Down Market
07.07.08 | Online Investing | 0 Comments | by junger

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Everywhere you go, you hear that the stock market is tanking — and analysts are discussing what you should do to keep more of your money.

While my philosophy of index investing says to buy more when stock prices are low, I came across a guy using an additional method to get returns on his money: peer-to-peer lending at Prosper.com.

We've talked a little bit about Prosper before, but if you're new to it, the site allows users to make and borrow loans from other individuals at agreed-upon interest rates.

So if you've got some extra cash, you can bid on loans as part of or as the entire amount that a borrower is looking for. With interest rates as high as 35%, it's an attractive alternative to watching your money tank in the stock market.

Have you considered loaning out money at Prosper? Share your experiences with us in a comment.
What Kind of Person is the Stock Market?
02.13.08 | Online Investing | 1 Comment | by junger

Stanley Bing has an amusing post up today about the qualities of the stock market and how they translate into a person.

Among them, he offers up:

Rich: There’s a lot of money in the stock market. Having all that money doesn’t really make it any happier, though.

Nervous: In fact, being so wealthy and privileged makes it incredibly anxious. If peace of mind rests in the feeling that one has nothing to lose, the Market is the exact opposite. It has everything to lose, first and foremost in its anxious, monkey mind.

Greedy: Over-riding that anxiety is a fine patina of opportunism and atavistic desire to get more, have more, to profit while others are screaming down into the ocean of defeat. When the greed overcomes the nervousness, the Market is happy and flies very high;

Gutless: On the other hand, even the specter of a shadow of a doubt that things could go the other way and the Market starts heading for the exit. In a disaster, this is not the person you want in the lifeboat with you. If it doesn’t push you overboard, it will try to eat your leg;

Intelligent: Nobody is saying the Market is stupid. It’s not. It’s just like a lot of my friends — too crazy to be smart a lot of the time;

Irrational: I don’t care how many PowerPoint presentations investment bankers, lawyers and security analysts offer to me at boondoggles past, present and future, nobody will ever convince me that the Market is rational. Buffett to the rescue! Hurrah! Let’s go up! Oooh. Wait. Buffett’s motives are impure. Ouch. Let’s go down. Sure, apologists for the Market will come up with a million reasons it does things. So do we all.

Of course it's possible to beat the market. It can be done, and it has been done.

But the more important question: is it worth it? What will it cost you to beat the market?

I don't know about you, but I don't have the time or money to try and beat the market. The chances of it happening are slim, and even if it happens, it'll cost you the difference in fees.
Digg Tackles 401(k)s: Why The Dow Drop Doesn't Matter
01.18.08 | Money, Online Investing | 0 Comments | by junger

While the mainstream media is all over the place with news of the stock market's big drop Thursday, the community at social news site Digg isn't worried.

Check out some of the right-on-the-money comments from this story: Have any money in a 401(k)? You just lost a huge chunk.

okrbot:

cause letting it sit under my matress is so much better. It can take a dunk considering its been steady going up for the last five years.

mz00m:

The market will come back eventually. Now is actually the perfect time to BUY! Buy cheap sell high, and live below your means, you will retire well.

bentheo:

the title has nothing to do with the article. the whole point of a 401k is longterm investment for your retirement. one crappy period in the span of the 40 years until you retire really isn't worth losing any sleep over

These comments are encouraging, especially when the mainstream media is so focused on the stock market's fall.

Now, one could argue that Digg users tend to be younger than most mainstream media consumers, therefore have a longer time to go before they retire.

But it's really good to see smart personal finance fundamentals spread.

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