The lure of money for nothing

My dad lost some of his retirement money in the past year's market crash -- which I hope is now behind us, but I'm as much in the dark as anyone. I was silently critical of him, at first, when he told me about his situation. He had left money in stocks -- probably too much for his age (77) and what the financial advisers call his tolerance for risk. After his loss, he moved more money into bonds. He kept some in stocks to try to capture the "upside" -- more investment jargon -- as the economy recovers. But I would soon discover more sympathy for my dad's investment strategy.

Our college savings eroded last year too, even though it was in a slow-growing fund. I was looking at the numbers online last week and wondering why we seemed to have the worst of both worlds: neither the security of bond investments, nor the growth of stocks. I should say here that we have two of those 529 plans -- one for each daughter -- which are run (in most cases, I think) by the chief financial officers of the states where they're available. So, I hadn't had much involvement with choosing where the money was invested, beyond typing in my daughters' expected dates of graduation, 2015 and 2017, and then crossing my fingers and hoping the money will be there. But as I was tooling around on the 529 site, I looked at the range of investment options. One aggressive fund is paying much better than the two I had. So, I moved the money. I can't even believe I'm admitting this -- I am so not a gambler, especially with precious dollars we're setting aside for our kids' future. I was nervous, but not so nervous that it stopped me. I kept thinking about how we're just paying our bills every month, just kind of matching the income and out-go. We're making sacrifices here and there -- cutting down on dinners out and music lessons in the summer. Why should I let this investment fund rob us of what amount we're able to set aside? As I see it, my savings were far worse off than if I had tucked them into a shoebox and stuck it in the back of the closet.

I wanted to risk a little reward.

So far, the new investment is working. I haven't quite recovered our losses, but almost. I'm checking the numbers daily, and it's kind of fun to feel that I've made a good decision, and to look forward to a better total tomorrow. It's addictive. You might say I'm hooked.

So, now I'm telling myself that I'll leave the money in the aggressive fund just until I cover our losses. I guess I'm betting that the world economy has bottomed out.