Feeling like a hedge fund

August 18, 2007

I have a friend/roommate that lives with us and pays me $600/mo to help out. It’s a good deal for her, because I don’t charge anything else, and she enjoys all the benefits that we do. The $600 pretty much covers my HOA and the utilities. Not really financially worth it for me to give up a room for that, but at the same time I’m helping a friend out.

She’s having some problems this month and still hasn’t paid rent. For that reason, and because I decided to clean my savings in order to invest in the market, I’m feeling like a hedge fund. With no liquidity at all. I think I have around $2500 in my checking/savings, but $2000 is already budgeted for other bills. If anything comes up, I will need to either sell some of my stocks at a loss or have to ask my mum for a small loan

That’s the problem that’s affecting the economy now. They don’t have roommates late with their payment, but they have a lot of people defaulting on their mortgages, which is causing a liquidity problem in the market. These hedge funds need cash to pay their investors, so they need to sell their stocks to do that.

I’m not a financial analyst, so I tried my best to explain the problem as I was able to understand it.

Posted in Finances, Investment