A real pain in the portfolio

Looking at my investments lately is a lot like watching a train wreck — I know I should avert my eyes, but I just can't make myself stop peeking.

Looking at my investments lately is a lot like watching a train wreck — I know I should avert my eyes, but I just can’t make myself stop peeking.

Lately, I have had to do more than peek. My son starts college in two weeks, which meant I celebrated my own rite of passage by transferring funds out of his Section 529 college savings account to pay the first semester’s tuition.

Ouch. Not only did the withdrawal hurt after so many years of investing, but so did taking money from an account that had dropped in value.

I was thinking of asking the folks at SUNY’s University at Albany to give me a few more weeks (or months) to let me rework the conservative portfolio just a bit before I paid the bill. But I know how heartless big institutions can be when they provide a service and expect payment, so I bit the bullet and sent them the money.

If writing that check wasn’t enough to kick-start my ulcer, glancing at the account summary of my retirement savings plan did the trick. I am no Bill Gross or Warren E. Buffett, but I am no financial idiot either.

I am a conservative investor who set up a diversified portfolio that was de-signed to weather financial storms. But when I opened the statement, I was winded by my shrinking fortunes.

Still reeling, and being a glutton for punishment, I fortified myself with two dual-action Pepcid Complete tablets and decided to peek online at my individual retirement account. I figured, why not go for the trifecta while medicated?

Well, I looked. And all I could say was, “Oy vey.”

I am going to have to work until I drop dead.

OK, maybe I was overreacting. So I did what I have done for the past 25 years when I have an investment question: I called my longtime financial adviser, Harry.

He listened to my distress call and calmly said: “Jim, stay the course we set. You need to keep the current investment strategy we established.”

I disagreed.

I wanted to discuss some new asset allocations.

Harry started muttering something about smart investors’ not reacting to the market’s ups and downs.

But still suffering from statement shock, I sarcastically asked Harry if he would investigate cat food companies for me because I figured I would be buying lots of Meow Mix and Tasty Treats in my golden years.

(While he laughed, I wondered whether 9Lives goes with red or white wine.)

Harry reminded me that we had devised plans a year ago to maximize my investments in a weakened economy. He and I had worked out a mix of equity and fixed-income investments based on my goals and risk tolerance, which happens to be very low.

And even though Harry argued with me about the wisdom of my choices — which include low-risk vehicles, including bonds and money market funds — he has accepted my investment conservatism. Over the phone, I could hear him shaking his finger at me and reiterating that I shouldn’t obsess over short-term ups and downs in my portfolio.

Harry was right. The plan is for me to look at my investment positions once or twice a year to be sure that I am comfortable with the asset allocation (though I actually do that once a month, but I never tell Harry).

When I mentioned cat food again, he reminded me of the five-year fixed annuity I purchased a few months ago. That annuity pays 6.75% a year, which beats the heck out of any certificate of deposit on the market right now.

I started to calm down, as did my ulcer.

After more than two decades of working with Harry, he has learned how to dodge my anxiety bullets. He won the battle again.

“Jim, remember what I always tell you. In tough times, never review any of your financial statements unless you are willing to deal with the stress,” said Harry, who was laughing as he hung up the phone.

I popped another Pepcid and went back to work.

Jim Pavia is editor of InvestmentNews.