KERA

Essay: Investing in Something Tangible

The last two weeks have seen wild swings in the stock market. Like many Americans, it left commentator Charlotte Huff unsure about how to handle her money. (2011)

 

By Charlotte Huff

The stock market plunged 634 points the same day that contractors arrived earlier this month to demolish our bathroom.

They hoisted large hunks of World War II-era ornamentation through the window into a nearby dumpster: pink tile, dolphin-accented fixtures, a rusted gas heater. That bathroom represents significant square footage in our two-bedroom two-bath Craftsman Bungalow. And we had scrutinized every dollar as we hammered out the bid with a general contractor.

But I still relished the sound of demolition, even as I watched the Dow crater yet again. Unlike the stock market—a mirage of hope these days—my husband and I were actually investing in something tangible. For 10 years, we’ve been showering in a pink cave, the tile pieces flaking off along the bottom. On winter mornings, with no insulation protecting the walls, our breath will frost the mirror.

Perhaps it’s just rationalization on my part. But I’m increasingly coming to believe that diversification will mean something different for us, the generation that hit our peak earning years after the boom stretch of the 1990s.

For years, my husband and I have sunk our hard-earned dollars into 401Ks, Roth accounts and a 529 to save for our son’s college years. But after the last roller coaster wave, the one that preceded whatever is happening now, we got out of individual stocks, thankful that we had survived the thrill ride down and back up. Then we stashed that money in a cash account to finance something real: improving our Fort Worth home.

I better understand why my grandfather, who dropped out of high school during the Depression to help support his family, never lost his hankering for the solid heft of gold. As a result, my grandmother enjoyed a lot of it: heavy bracelets, rope-like necklaces and some Christmases just plain gold coins. Their safe deposit box bulged with security.

These days I think the big-time stock market players, those who build their portfolios on the shoulders of middle-income folks, have reason to worry. We recently had dinner with a friend, who detailed how all of his savings were tied up in precious metals, including gold, and a few coin and comic collections. Before 2008, I would have thought he was nuts. Now, I listen and wonder whether he’s the sage and I’m the sap.

For the time being, my husband and I will forge on. We’ll continue to make regular IRA contributions through a mix of mutual funds and try to catch the next market sag to beef up our son’s college fund. But we’ll also hold some money in reserve for more visible assets, such as our insulated bathroom with its frameless shower.

Housing values certainly can decline, my husband reminds me. But we’ll still have a home, I reply. What’s the alternative? Nothing more than a fleeting value on a computer screen that might vanish before we can reboot our options.