It’s been nice to see the stock market hold its ground and have some pretty good days lately, but I opened my mail last week to find my quarterly statement that summarized my portfolio. The first thing I noticed was that my investments had almost dropped 8% this past quarter it was hard to stomach. How did you do?

Even though this was to be expected, it does not make it any easier to look at the big red, negative number. But this doesn’t change a thing about my long-term outlook and confidence in the stock market. From the research I did on Buying the Housing Slump, it’s proven that a diversified portfolio generally beats real estate investments and is a reliable strategy to increase your net worth.

Did you know that the stock market has never produced a loss in any given 15 year history? That means that based on historic data there is a 0% chance in losing money when investing in the stock market. What other investment can return an average 10% return without any historical risk.

So while it is not easy to look at my financial statement and subjectively convince myself that it is a good idea to keep investing, I know objectively that this still is a great a time to invest. The market is unpredictable, and it is generally just a few key big performing days that make one’s portfolio profitable in a given year. So for now I am going to continue to take advantage of the short-term volatility and keep investing on the down days in order to be “in” the market when the rebounds occur.

If you are having trouble being “in” the market, remind yourself why you are investing. You know there is short-term risk that allows stocks to be a good investment, you know that over time your portfolio will be profitable over time, and you know that compound interest will make you rich. If you are selling simply because of panic, all you are doing is locking in your losses now.

As Robert Arnott, founder and chairman of Research Affiliates, states:

The way to respond to this kind of market is not to ask yourself, ‘What do I do to make money in the next three months?” but “What would I want my portfolio to look like over the next 30 years?

Take advantage of the opportunity to buy cheap investments while you can. Opportunities like these only happen a few times in a lifetime. This is when the rich become ultra wealthy.

Millionaire Money Habit: Ignore the short-term performance of your portfolio, and remind yourself why you are investing in the stock market. Now more than ever it is important to stick to your investing rules and invest in a properly balanced portfolio. -RT
photo by El Gran Dee

Here is a list of some of the best personal finance articles from my favorite personal finance websites. To kick start your week, spend some time digging through the Millionaire Money Habits archives and the links below to improve your financial literacy and increase your net worth.

Spotlight: Philip Brewer at WiseBread shows how he prepares for Budgeting in a time of inflation by explaining that, “The number one tool for dealing with inflation is to have a contingency plan in your budget.”

Other Great Personal Finance Articles:

• Wall Street Journal Is Advocating Stockpiling Food – Is This A Recession Or Not? at My Two Dollars
• Personal Finance Psychology at Blueprint for Financial Prosperity
• 6 Ways to Find Additional Money at The Wisdom Journal
• The Secrets Credit Card Companies DON’T Want You to Know at Gather Little by Little
• Economic Stimulus Rebate – Frequently Asked Questions at Cash Money Life
• The Importance of Tenacity at beingfrugal.net
• My Biggest Budget Busters at Moolanomy
• Recessions and the State of Our Economy: A Visual Primer The Digerati Life

Personal Finance Carnivals:

• Carnival Of Personal Finance
• Carnival of Money Hacks
• Carnival of Money Stories
• Carnival of Twenty Something Finances

Millionaire Money Habit: To build wealth, you need to perpetually improve your financial literacy. Digest as much information as possible and stick to a plan that works for you. In addition to the articles above, pick up one the recommended books found at the footer of this website, and be sure to subscribe to the RSS feed or by email to be notified of new articles.

At first glance the difference between a bank and a credit union may seem insignificant, but depending on your needs there are some pretty significant advantages to belonging to one over the other.

Bank vs. Credit Union

A credit union is a not-for-profit financial institution that is owned by the people who belong to the credit union. Its members are made up of people who share a common bond or affiliate, such as belonging to the same church, school, employer, organization or community.

Since every member is an equal owner and therefore shares a common bond with the other members, the personal experience tends to be much better at a credit union. As co-owner, the credit union works for you to make sure you are happy and have an enjoyable experience. According to Bankrate.com, “Credit unions have topped the consumer satisfaction ratings in American Banker’s annual survey for 12 years in a row.”

Since a credit union’s primary focus is its people, or co-owners, they are more concerned about making you happy than turning a profit. As a result, credit unions typically offer more educational services and seminars to teach you about all financial products so you can make the best decision. Banks, on the other hand, may be more inclined to recommend only those products that bring in higher corporate profits.

As a not-for-profit organization, credit unions have many advantages over banks. They are exempt from most state and federal taxes, do not have many marketing costs, or high salaried executives. This allows credit unions to pass on great rates to their members, including:

• Higher Interest Rates on Savings Accounts
• Lower Rates on Auto Loans, Mortgages and Credit Cards
• Free Checking Accounts
• Lower or No Penalties for Overdrafts and Late Payments

Your money is also just as safe as with a standard bank since up to $100,000 of your cash is insured and regulated by the National Credit Union Association, which is the same as the Federal Reserve Bank’s coverage.

The down side of a credit union is their conveniences. They will typically have less ATMs, fewer branches, and usually lack variety in investment products and services. Finding and joining a credit union can be a bit trickier too. It may just take a phone call to your human resource department to see what options your employer offers. Otherwise you may have to do a bit of homework, but virtually anyone in the U.S. can join a credit union. Use www.findacreditunion.com to help you do your credit union search.

Banks, on the other hand, are publicly traded, for-profit organizations. Unless you have a personal banker, you generally will not receive the same level of service and satisfaction as you would from a credit union. Rates, fees and penalties will undoubtedly be higher too, but these inconveniences may be outweighed by the benefits.

Banks will have a much larger selection of products for you to choose from, including retirement plans, stock investing programs, and other services not offered by credit unions. Secondly, banks can offer more convenience with more ATMs and more branches, and it is as simple as walking in the door to join.

So when deciding between a bank and a credit union, you have to think about your goals and personal needs. If you want better rates and more personalized service, go with the credit union. If convenience is your number one criteria then stick with a bank for your personal banking needs.

Millionaire Money Habit: While it may take a bit of upfront work to find a credit union that you can join, the service, satisfaction and financial education you can receive may be well worth the effort. It doesn’t hurt to take some time to shop around and ask yourself what’s most important t you in a financial institution. -RT
photo by Innocent Fraud

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