I can’t believe I’m still hearing it:  Someone on CNBC just this morning said, Oh, don’t take your money out now, you’ve lost too much!!  Yeah, great, wait for Dow 5000.  There are still plenty of financial experts saying that’s possible before it’s all over.

Guess what? The tee vee “experts” were saying that in November ’08 too, so if you listened - to CNN or CNBC or FOX or XYZ  - tell me, where are you now?

I’ll say it again: in a volatile market, why not get out of mutual funds, at least with part of your money, and put it somewhere you can make a little, and wait for things to turn? I would rather make 2% in a savings account for a year than lose another 10% in a stock fund.

Some ideas:

- For investment accounts: Get out of the dang index funds – they include too many companies that are at risk.  If you aren’t willing to learn to invest stock so that you can confidently buy individual stocks or ETFs, then put your money in a CD.   If your financial adviser is still losing you money, don’t be afraid to move your account.  Anyone advising you to stay put is going to lose you more money.  IMHO.

- For a retirement account: If you get a company  match, meet it with your 401(K) contributions, but NO MORE.  Then take that money and invest in insured money market funds or “inflation fighter” funds – avoid the index funds!  They are for later, probably not this year, but maybe next, not until you are confident the market is again moving in the right direction.

- If you have a 401(K) right now, you are likely down 30-40%.  But don’t take it all out of your retirement account – you’ll get slammed yet again with fees and penalties.  Reallocate within your 401k to whatever funds are closest to cash, Treasuries or A rated bonds – ask your plan administrator.  (NOTE:  This is not 100% safe either however in a credit freeze.)

- If you lose or leave your job, immediatly switch your retirement account to a 401k rollover – as well as funds you haven’t rolled over from previous jobs – roll them into self directed IRA accounts, using a discount brokerage.  DO NOT ROLL OVER TO YOUR NEW COMPANY – or your investment options will be severely limited to mostly stock index funds!  In a self-directed fund, you can invest in ETFs for commodities, metals, shorts, and a wide variety of other funds. We like Scottrade as well as TradeKing for to discount brokers.  (Not affiliate links! We just like them!)

- For non investment money, get your hands on as much cash as you can, and put it into an insured money  market fund. Hold off doing anything until you (1) spend time to learn to invest stock so that “what to do” is not a crap shoot, (2) understand why your 401K was so risky to begin with, and (3) find good ideas about where to look for solid returns, including experts who have a track record you can believe.

Now you’ll have to start to learn to invest money.  There are places to make money, maybe not in a 401k but if you also open a Roth IRA or other account, you can make up for that outside your job. And if you get laid off, you can roll the money into your self-directed account.

There are places to be making money now, but you have to feel comfortable you know what you’re doing, and be comfortable with a degree of risk that we haven’t been trained to accept. But the rewards in this market, and for the next few years, will only come with more risks.  If you aren’t comfortable with that, then you need to stay safe in cash or similar vehicles.

I like Dave Ramsey.  It was because of his book, Total Money Makeover, that I started using the envelope system, and actually now save some money each month.  I think he’s being proven correct right now about being debt-free – and I’m working to get there myself.

But he’s still telling people to put their money in “quality index funds” so you can earn “14% over time” – WHAT??  There is NO truth to the 14% number (actually that’s the highest I’ve ever seen – 10%, 12% is the usual number).  In this market, telling people to do this is a complete misrepresentation of what their specific, actual results may or may not be.

The simple fact is that any money put into index mutual funds 10 years ago are back where they were then.  There has been NO increase in the last ten eyars – let alone 14%!!  How many people will blindly do this based on his suggestion alone?

He is good with the “get out of debt” idea. But he should just plain stop telling people where to put their investment money.  The whole “stick it in an index fund and sit back and enjoy the winnings” method is out the window.  It never really was true, and today even less so, that this is the best way to invest.

Bottom line:  If you don’t know anything about investing, stay out of the market.  Don’t get your advice from people on tee vee.  If you want to hire somone, you better know what the heck they are talking about, or you’ll get screwed, either intentionally or accidentally.  If you don’t know and don’t want to know, then buy CDs.  Anyone who invested in a 6% CD ten years ago would right now be far far ahead of anyone who had their $$ in the market.

Related articles by Zemanta

• How I Paid Off $35,000 in Debt, and How You Can Too
• Crunch Time – Prepare For the Personal Credit Tsunami