Tuesday, March 31, 2009

Capitalism and wars

In a capitalist country where defense equipment manufacturing and innovation are privatized, we need periodic wars to keep those companies afloat. For example, in US, Raytheon, Lockhead_martin and other defense manufactures rely heavily on Govt's consumption of military equipment for survival.

Periodic wars like Vietnam, Afghanistan(1980), Gulf war, Sep_11 response and Iraq war were essential in keeping these companies afloat.

Capitalism buys us freedom and "wars" is the cost of it. I am willing to pay taxes for my freedom.

Sunday, March 15, 2009

No risk = No return holds for 401(k)s as well

People are feeling the pain that their 401(k)s have lost a ton of money in last year. Some are questioning if 401(k) plans with privately managed funds is even a good idea.

There are certain types of funds in 401(k) that never (almost never) lose money. They are called money market funds. They are no different than your savings accounts. But, who wants them? No one.. Everyone wants to invest in stocks (or) bonds..

In the long run, holding on your mutual funds, which probably lost more than 30% value in last year, is still a good idea.