Steps to take in 2009 to deal 2008 financial losses

• If you lost your shirt in 2008, here is what you have to do - http://ac360.blogs.cnn.com/2009/01/03/ok-you-lost-your-shirt-heres-what-you-have-to-do-now/ - By Anderson Cooper
  • Friday's massive market rally is a perfect example of why you can't be trying to wait out this market turmoil.
  • Take these 10 steps right now to become a better investor:
    • 1. Pay off any debts costing 10% or more per year before investing for retirement.
    • 2. Take a "risk tolerance" test to find out what kind of investor you are, and don't put money you'll need access to within five years into the market.
    • 3. Tax-advantaged savings plans - especially those to which your employer contributes - are just about the only "free money" you'll ever get.
    • 4. Asset allocation - the appropriate distribution of your money
      across several types of investments - lowers your risk AND earns you
      a higher return than if you just invested in one or two types of assets.
    • 5. Understand how different "asset classes" work. Take a few hours
      to learn the key features of stocks, bonds, cash equivalents and
      alternative investments.
    • 6. Mutual funds, index funds and Exchange Traded Funds (ETFs) give
      you instant diversification, with less risk than owning individual stocks.
    • 7. Keep your investment costs low. Fees, commissions and expenses
      can eat a big chunk of your returns over time.
    • 8. Rebalance your portfolio at least once a year. Keep your portfolio aligned with your "asset allocation" by selling some of your winners, and buying more of some investments that have suffered.
    • 9. If you leave your employer, roll your 401(k) over into an IRA immediately. It's the only time you can convert your 401(k) into a retirement vehicle with many more options.
    • 10. Remember that investing takes discipline, but it allows you to
      control your financial future.

Reader comments:

• Despite the fact that California is facing its greatest economic crisis in the history of the state, environmentalist extremists are hindering what's left of the business climate with measures designed to curb global warming.
  • The Earth cooled in 2008. Last year's global warming hysteria has not yet been countered by responsible media coverage. If the media peers closely at the issue, it will have to acknowledge that Al Gore and his friends have pushed junk science down the World's throat. Global warming is more about the weakness of the human mind and psychological group think. That's the real story.
• January 3rd, 2009 7:15 pm ET - i have lost 70 persent of my welth this year and the taxes i pay are bailing everyone out when will it be my turn i would have been better off to put my money in a coffee can and burried it in my back yard