Financially Smart People, IRA Question

[musclemom]

My 24 year old son, who was recently discharged from the Air Force, has a mutual fund IRA. He will not be able to make contributions to that IRA for at least the next 24 months due to the fact he will be going to college full time.

The IRA is NOT doing well. It's leaking money slowly.

We have the option of putting the money into different mutual funds that are much less volatile, like bond funds, etc. (but he's in pretty stable stuff to begin with) or converting the mutual fund to a CD, at least for the immediate future until he gets employment.

I'm not financially savvy. What would y'all do?

 

[heatherrae]

My 24 year old son, who was recently discharged from the Air Force, has a mutual fund IRA. He will not be able to make contributions to that IRA for at least the next 24 months due to the fact he will be going to college full time.

The IRA is NOT doing well. It's leaking money slowly.

We have the option of putting the money into different mutual funds that are much less volatile, like bond funds, etc. (but he's in pretty stable stuff to begin with) or converting the mutual fund to a CD, at least for the immediate future until he gets employment.

I'm not financially savvy. What would y'all do?

Your son is still young enough to take some volatility so long as you think the fund is a well-managed and historically well-performing fund. If he wants to roll it over into a S&P 500 index fund, that would take some of the volatility out of it and not get hit with the penalties of early withdrawal, which are significant.

He's too young to be invested in bonds and CD's in my opinion, anyway. They are too conservative of an investment for someone so young.

I'm no money guru, but that is just my 2 cents.

 

[Beaverscratch]

What she said!

At 24 he too young to be in anything but stock funds, which yes will se volitility over time, BUT will go up. There has been only a few periods in history where the market has gone down and stayed down for a long time. Right now is the time for him to invest..He would pick up shares at a lower than average cost.

One word of advice, open a Roth IRA for the kid. At his age it will have so much time to grow TAX FREE!

 

[musclemom]

What she said!

At 24 he too young to be in anything but stock funds, which yes will se volitility over time, BUT will go up. There has been only a few periods in history where the market has gone down and stayed down for a long time. Right now is the time for him to invest..He would pick up shares at a lower than average cost.

One word of advice, open a Roth IRA for the kid. At his age it will have so much time to grow TAX FREE!

It is a Roth IRA. I opened it for him when he joined the service. I must have explained this wrong, that's how stupid I am about this shit. The IRA is in mutual funds. He hasn't been able to make contributions to it since February of this year and won't be contributing to it for a long time. I thought if I converted the mutual fund Roth IRA into CD Roth IRA it would be more stable with no chance of loss, which is happening now. It's easy enough to change the funds the IRA is invested in, literally point and click shit. Other than S&P 500 what's REALLY stable? I'm scared to death of the whole stock market thing right now and I flunked economics HARD.

 

[heatherrae]

It is a Roth IRA. I opened it for him when he joined the service. I must have explained this wrong, that's how stupid I am about this shit. The IRA is in mutual funds. He hasn't been able to make contributions to it since February of this year and won't be contributing to it for a long time. I thought if I converted the mutual fund Roth IRA into CD Roth IRA it would be more stable with no chance of loss, which is happening now. It's easy enough to change the funds the IRA is invested in, literally point and click shit. Other than S&P 500 what's REALLY stable? I'm scared to death of the whole stock market thing right now and I flunked economics HARD.

Ah, I see. Well, you don't need to sweat the volatility on a day to day basis or you will drive yourself crazy. Keep your boy in stocks, just spread around as much as you can. That is why the S&P 500 index is so sweet, it is like spreading it out across so many different individual companies, and there is no fear of mismanagment with an index fund.

How does your son feel about it? Perhaps let him begin to manage his own funds and see what sort of risk level he feels okay with.

HTH

 

[cindylou]

I'd leave it alone. Pretend its not there. Unless he's gonig to retire in the next 5 years dont worry about it

 

[Raptorex]

My 24 year old son, who was recently discharged from the Air Force, has a mutual fund IRA. He will not be able to make contributions to that IRA for at least the next 24 months due to the fact he will be going to college full time.

The IRA is NOT doing well. It's leaking money slowly.

We have the option of putting the money into different mutual funds that are much less volatile, like bond funds, etc. (but he's in pretty stable stuff to begin with) or converting the mutual fund to a CD, at least for the immediate future until he gets employment.

I'm not financially savvy. What would y'all do?

He is young, pusrue a top rated (4-5 star) Morningstar fund (usually available thru the same group that manages his).

I recommend

http://screener.fidelity.com/ftgw/e...ON&ad=ON&amt=ON&rtng=4&rtng=5&refpr=MFRes_011

 

[musclemom]

Ah, I see. Well, you don't need to sweat the volatility on a day to day basis or you will drive yourself crazy. Keep your boy in stocks, just spread around as much as you can. That is why the S&P 500 index is so sweet, it is like spreading it out across so many different individual companies, and there is no fear of mismanagment with an index fund.

How does your son feel about it? Perhaps let him begin to manage his own funds and see what sort of risk level he feels okay with.

HTH

He really doesn't give a fuck. No opinion what so ever.

I would prefer he manage this shit himself but ... okay, long story short, I'm not a control freak, he has the most remarkable case of ADD you'll ever run into, though. I'm trying to give him basic guidance without being too overwhelming, which is tough. The money issues have been tough. He is the overdraft king. I figure by the time I'm too old to help him he should be squared away for most stuff and have settled down even more.

 

[digimon7068]

It is a Roth IRA. I opened it for him when he joined the service. I must have explained this wrong, that's how stupid I am about this shit. The IRA is in mutual funds. He hasn't been able to make contributions to it since February of this year and won't be contributing to it for a long time. I thought if I converted the mutual fund Roth IRA into CD Roth IRA it would be more stable with no chance of loss, which is happening now. It's easy enough to change the funds the IRA is invested in, literally point and click shit. Other than S&P 500 what's REALLY stable? I'm scared to death of the whole stock market thing right now and I flunked economics HARD.

nothing is stable right now. . .not even currency. . .like some of the others said, if it's in good funds already, leave it there.

is all of his college going to be paid for through the g.i. bill? if not, and he's going to need money for tuition and other (qualified) expenses, you could take the money out of the ira (penalty-free if it's going to be used to pay tuition) and use it for tuition (and other qualified expenses). . .also, if you put it the funds into one of those pre-paid tuition accounts (like i have set up for my kids), you buy tuition at today's dollars and then, when tuition increases, your money increases in value. . .depending on where he's going to school, tuition will probably go up 10 to 15% per year so, after the money is in the prepaid tuition account, it will increase in value by 10 to 15% per year. . .show me another investment with that kind of guarantee.

you can look at it as an investment in "his" earning potential, instead of a bunch of companies in a mutual fund. . .

 

[Raptorex]

nothing is stable right now. . .not even currency. . .like some of the others said, if it's in good funds already, leave it there.

I don't know bro, but my 401k accounts are up 8.2% since April 1st, and my personal investments are up about 18%, if what she says is current information, she shouldn't be leaking money. I'd move it out, probably a bad fund.

 

[digimon7068]

I don't know bro, but my 401k accounts are up 8.2% since April 1st, and my personal investments are up about 18%, if what she says is current information, she shouldn't be leaking money. I'd move it out, probably a bad fund.

you have oil company stuff. . .of course it's up. . .

 

[Raptorex]

you have oil company stuff. . .of course it's up. . .

my 401k is widely distributed in mid, small and equity indexes. If your not up since April 1st there is an issue bro, a monkey could hit the target.

 

[Smurfy]

this is an area i know nothing about
but im impressed with all the financial advisors here on EF!

 

[digimon7068]

my 401k is widely distributed in mid, small and equity indexes. If your not up since April 1st there is an issue bro, a monkey could hit the target.

my original pool of retirement assets (from my first two post-college employers) hasn't even made it back to where it was before it crashed in 2000. . .

 

[75th]

my original pool of retirement assets (from my first two post-college employers) hasn't even made it back to where it was before it crashed in 2000. . .

There is something very, seriously wrong with your allocation if that's the case. Unless, of course, you change shit around all the time. The market as a whole is up 10% since March 15.

Musclemom...if its not a lot of money (less than $5-10k) put it into an asset allocation mutual fund. Dont worry about morningstar ratings as todays 5 star is next years 2 star.

Find a fund that's 85% stocks and 15% bonds.

Have the company stop sending you statements and forget about it until he starts contributing to it or until he turns 59 1/2.

 

[Razorguns]

"buy and hold" concept still applies.

Don't worry about volatility, up/downs, etc. No one becomes millionaires overnight in IRA's. Find something stable and will hold good value over decades. Lots of good suggestions already posted here. Remember, this is "passive" investing. Dont' be cavalier.

r

 

[digimon7068]

There is something very, seriously wrong with your allocation if that's the case. Unless, of course, you change shit around all the time. The market as a whole is up 10% since March 15.

fuck you. . .there isn't shit wrong with my "allocation". . .your problem is that all your gawddamn information is based on bullshit recent history. . .so sonny. . .let's take a litte trip down memory lane:

before the shit hit the fan in 2000, i had invested (not counting reinvestments, etc. . .just salary reductions) about $50,000 in my retirement accounts. . .right before the crash, it was worth about $125,000. . .i changed jobs not to long after that and rolled everything into one ira. . .good funds. . .they've increased in value each year. . .but that pool of funds still isn't worth $125,000 again. . .i can show you a SHITLOAD of people just like me. . .

you're either too damn young to remember when we were all gaining 20 to 30% per year on the value of our funds (which was complete bullshit, cause a whole bunch of those companies aren't even in business anymore), or you're. . .well. . .let's just leave it at that. . .

 

[Beaverscratch]

MFS has a fund named the Diversified Target Return Fund. Its a stock fund that has a portion invested in put options so when the market drops it stays somewhat steady. The bad part is that when the market is way up the fund is only up 7-8 %...so its a pretty conservative play.

If history repeats itself...which it always has, you will be fine just where he is.

Let me tell you a story. true deal. Dalbar did a study of returns on individual investors vs the average stock mutual fund over the past 20 years. The average investor averaged 3.7% return per year over that time frame. The AVERAGE, not a good fund, and average fund averaged 11.7% return over that same period of time. What is the moral of the story? Keep your hands out of it! If you let emotion into your portfolio you will make mistakes. Be disciplined.

 

[75th]

fuck you. . .there isn't shit wrong with my "allocation". . .your problem is that all your gawddamn information is based on bullshit recent history. . .so sonny. . .let's take a litte trip down memory lane:

before the shit hit the fan in 2000, i had invested (not counting reinvestments, etc. . .just salary reductions) about $50,000 in my retirement accounts. . .right before the crash, it was worth about $125,000. . .i changed jobs not to long after that and rolled everything into one ira. . .good funds. . .they've increased in value each year. . .but that pool of funds still isn't worth $125,000 again. . .i can show you a SHITLOAD of people just like me. . .

you're either too damn young to remember when we were all gaining 20 to 30% per year on the value of our funds (which was complete bullshit, cause a whole bunch of those companies aren't even in business anymore), or you're. . .well. . .let's just leave it at that. . .

A lot of funds increase in value every year...doesnt mean that they are what one would call "good funds."

I get all my "gawddamn" information from experience seeing as how I manage money for a living...so do the people who work with and/or for me.

When you take a look at any major broad index since the tech crash (excluding technology, obviously), they have all made their money back more than a few times over. So, yes, chances are you are probably too overweight in one or more different categories. I have met a "shitload" of people just like yourself, and 100% of the time they had too much in an area they shouldnt have, or after the market crashed they cashed out then decided to reinvest too late after the market had already rebounded.

I would offer some basic advice if I could get more info on what you have, but if you want to keep doing what youre doing because youre in "good funds" then more power to you.

But what would I know.

 

[75th]

MFS has a fund named the Diversified Target Return Fund. Its a stock fund that has a portion invested in put options so when the market drops it stays somewhat steady. The bad part is that when the market is way up the fund is only up 7-8 %...so its a pretty conservative play.

If history repeats itself...which it always has, you will be fine just where he is.

Let me tell you a story. true deal. Dalbar did a study of returns on individual investors vs the average stock mutual fund over the past 20 years. The average investor averaged 3.7% return per year over that time frame. The AVERAGE, not a good fund, and average fund averaged 11.7% return over that same period of time. What is the moral of the story? Keep your hands out of it! If you let emotion into your portfolio you will make mistakes. Be disciplined.

True, although the Dalbar study compared the average "active" investor to the S&P 500, not another fund.

As for the MFS fund, MFS is a good family but these long-short funds I would recommend against. Especially with his time frame, theres no need for inflation swaps to make up the largest portion of your top ten holdings.

 

[Razorguns]

"Don't invest in something you don't understand"

Buffet.

r

 

[Raptorex]

just listen to my advice, these two amateurs will lose you money

 

[digimon7068]

A lot of funds increase in value every year...doesnt mean that they are what one would call "good funds."

I get all my "gawddamn" information from experience seeing as how I manage money for a living...so do the people who work with and/or for me.

When you take a look at any major broad index since the tech crash (excluding technology, obviously), they have all made their money back more than a few times over. So, yes, chances are you are probably too overweight in one or more different categories. I have met a "shitload" of people just like yourself, and 100% of the time they had too much in an area they shouldnt have, or after the market crashed they cashed out then decided to reinvest too late after the market had already rebounded.

I would offer some basic advice if I could get more info on what you have, but if you want to keep doing what youre doing because youre in "good funds" then more power to you.

But what would I know.

when you put in 50 and it grows to 125 and then it drops down to 40, do you have any clue how long it takes to even get back to like 70 when it's only increasing by 10 to 12% per year?? hello??? you manage people's money, but i'm a cash flow guy. . .show me the wealth. . .

sure, i have some individual stocks that have done very well. . .fed ex for instance, i purchased most of my shares for $30 to $40 in 2000 and 2001, and the last time i checked (five minutes ago) it closed at $92. . .of course it was at $111 at this time last year. . .

but most of what i own is diversified. . .and the growth rate doesn't even come close to that. . .sure. . .it beats the bank by a pretty healthy margin, but it's nothing compared to those glory days (where too many of the people in charge were cheating their asses off and the "growth" was merely on paper and had no roots in reality)

 

[Raptorex]

Digimon, ask 75th about his Ambac recommendation lolz

http://finance.yahoo.com/echarts?s=ABK#symbol=ABK;range=1y

 

[digimon7068]

Digimon, ask 75th about his Ambac recommendation lolz

http://finance.yahoo.com/echarts?s=ABK#symbol=ABK;range=1y

i have a bunch of broker friends/clients, hell, one of my buddies from college has his own wall street firm and he makes more money than God. . .but NONE of them, when pushed can show me the real growth. . .everyone gets excited about the market reaching all time highs. . .but show me normal consistent investors/savers, people whose household income is $80,000 to $200,000 per year, that have amassed large sums of money as a result of all these record breaking highs. . .where are they?? there's no real magic for most of us. . .you consistently save, you diversify to help insulate against the ups and downs, and over a period of years your money will grow at a nice rate. . .

brokers and financial advisors are a lot like gamblers imho. . .they tell you about the assload of money that they took from the casino last saturday night, but they don't mention shit about how they lost their ass for six weeks before that. . .

i just use my one ira as an example. . .after i rolled a couple of 401k's into one ira, i never put another penny in it (i have other accounts that my monthly automatic withdrawals go in to). . .at one point it was "worth" around $125,000, right now it's worth around $70,000, but it was as low as $40,000 after a couple of crashes. . .

 

[Beaverscratch]

WRONG 75TH...Here ya go: http://www.selectedfunds.com/pdf/SFB&H.pdf

it is true in that any average stock fund, the results will be very similar to the results of the s&p due to the s&p representing the largest 500 companies. Largest usually meaning most profitable, so the fund managers are more likely to invest in those large cappers...

Pm me if ya wish, who is your BD?

 

[Raptorex]

i have a bunch of broker friends/clients, hell, one of my buddies from college has his own wall street firm and he makes more money than God. . .but NONE of them, when pushed can show me the real growth. . .everyone gets excited about the market reaching all time highs. . .but show me normal consistent investors/savers, people whose household income is $80,000 to $200,000 per year, that have amassed large sums of money as a result of all these record breaking highs. . .where are they?? there's no real magic for most of us. . .you consistently save, you diversify to help insulate against the ups and downs, and over a period of years your money will grow at a nice rate. . .

i just use my one ira as an example. . .after i rolled a couple of 401k's into one ira, i never put another penny in it (i have other accounts that my monthly automatic withdrawals go in to). . .at one point it was "worth" around $125,000, right now it's worth around $70,000, but it was as low as $40,000 after a couple of crashes. . .

I honestly don't agree with a strategy that is not pro-active. I don't mean day-trade with you 401k, however you should play the hot industry sectors - they really don't add much risk and the gains will be worth it. My two cents!

I manage multiple retirement accounts, although they have had their low periods, they have all doubled in the last 10 years.

 

[Raptorex]

We should start a small group to discuss investments.

If you guys want to get more advanced in investing in funds, we can discuss ETFs.

 

[Beaverscratch]

I honestly don't agree with a strategy that is not pro-active. I don't mean day-trade with you 401k, however you should play the hot industry sectors - they really don't add much risk and the gains will be worth it. My two cents!

I manage multiple retirement accounts, although they have had their low periods, they have all doubled in the last 10 years.

By the time an average Joe knows a sector is hot it fizzles out. You gotta be on your toes to play that game and more often than not you'll get burned. Good luck though.

My best individual stock play this year has been an ADR, baidu which is the chinese google pretty much. Ive made 40% since January when it hit a low. Buy the dips sell the rips if you are an indiviadual stock guy. If you invest in mutual funds..find one you like and stay with that bitch. Time and time again it pays to do so. invest heavily when the market is down.

 

[digimon7068]

I honestly don't agree with a strategy that is not pro-active. I don't mean day-trade with you 401k, however you should play the hot industry sectors - they really don't add much risk and the gains will be worth it. My two cents!

I manage multiple retirement accounts, although they have had their low periods, they have all doubled in the last 10 years.

how much of the doubling was gains and how much was additional amounts invested? i invest consistently, every month and, yes, my money does well. in fact, that ira that i was referring to, i'm sure it will be back up to around $100,000 by 2010. . .ten years after it crashed. . .which will effectively double it's value from the $50,000 that i actually put in it.

 

[Beaverscratch]

We should start a small group to discuss investments.

If you guys want to get more advanced in investing in funds, we can discuss ETFs.

ETFS are good. I am just now getting into those. I bought DBO in Jan. Its been good so far. I expect it to fizzle out mid summer though when gas levels off.

 

[Raptorex]

it really doesn't take rocket science, especially since we have the internet now - very easy - so many resources.

I buy heavily on the lows, also made some good cash on high-dividend stocks in 2008, follow one called MIC lately for a good play.

By the time an average Joe knows a sector is hot it fizzles out. You gotta be on your toes to play that game and more often than not you'll get burned. Good luck though.

My best individual stock play this year has been an ADR, baidu which is the chinese google pretty much. Ive made 40% since January when it hit a low. Buy the dips sell the rips if you are an indiviadual stock guy. If you invest in mutual funds..find one you like and stay with that bitch. Time and time again it pays to do so. invest heavily when the market is down.

 

[Raptorex]

how much of the doubling was gains and how much was additional amounts invested? i invest consistently, every month and, yes, my money does well. in fact, that ira that i was referring to, i'm sure it will be back up to around $100,000 by 2010. . .ten years after it crashed. . .which will effectively double it's value from the $50,000 that i actually put in it.

one account was static (no new money entered) from 1993 on. It is 2x the value at this point.

Morningstar ratings are for real, don't believe they are yesterdays news.

 

[Raptorex]

ETFS are good. I am just now getting into those. I bought DBO in Jan. Its been good so far. I expect it to fizzle out mid summer though when gas levels off.

I was strongly advised to put some money in this ETF going forward.

iShares MSCI Canada Index (ETF) (Public, NYSE:EWC)

 

[digimon7068]

one account was static (no new money entered) from 1993 on. It is 2x the value at this point.

Morningstar ratings are for real, don't believe they are yesterdays news.

that's exactly what i'm talking about with this particular account. . .when i rolled over two 401k's into one ira, i never put another cent in it. . .my total out-of-pocket investment was around $50,000. . .it's been worth as much as $125,000 and as little as $40,000 and by 2010 it should be worth around $100,000 again. . .now that is a wild-ass ride. . .

 

[Raptorex]

that's exactly what i'm talking about with this particular account. . .when i rolled over two 401k's into one ira, i never put another cent in it. . .my total out-of-pocket investment was around $50,000. . .it's been worth as much as $125,000 and as little as $40,000 and by 2010 it should be worth around $100,000 again. . .now that is a wild-ass ride. . .

Ok, now - when you saw that things were not looking good for say a year period, why didn't you just move that cash into a fixed bond fund? why take the ride down? I guess that is all I am saying.

catch up tomorrow. off to bed bro, thanks.

 

[digimon7068]

Ok, now - when you saw that things were not looking good for say a year period, why didn't you just move that cash into a fixed bond fund? why take the ride down? I guess that is all I am saying.

catch up tomorrow. off to bed bro, thanks.

i'm a friggin' accountant (cpa, cva, mst), it's not tax season yet i'm still at work at 12:38am on a thursday. . .i have time to be watching that shit and trying to figure out what to do?? plus, it basically doubled over a 10 year period. . .should i complain at all?? you wanna help take care of me?? pm me your digits.

 

[75th]

Digimon, ask 75th about his Ambac recommendation lolz

http://finance.yahoo.com/echarts?s=ABK#symbol=ABK;range=1y

I hate you. You know full well that abk was a in-and-out play, ya douche. I dont recommend individual stocks unless its part of an SMA.

 

[75th]

Ok, now - when you saw that things were not looking good for say a year period, why didn't you just move that cash into a fixed bond fund? why take the ride down? I guess that is all I am saying.

catch up tomorrow. off to bed bro, thanks.

Because 99% of people will get out too late then get back in too late.

If you dont need the money, its best to let the market take its course. If you had money in an S&P fund over the last 10 years and missed the 10 best days (as far as performance) you annual ROR would be in the area of 4.5% during that time, compared to 11.5% if you had stayed put.

Yes, being more active can lead to an extra % or two, but even I dont mess with my retirement accounts. I rebalance them twice a year, and thats it.

 

[75th]

I was strongly advised to put some money in this ETF going forward.

iShares MSCI Canada Index (ETF) (Public, NYSE:EWC)

Wasnt I telling you to buy GLD last year?

I sold it at an even 100.


ETFs are legit, especially from a tax standpoint...but theyre not nearly as exciting as stocks or options.

PS, Ive made all my money back due to V's performance over the past 2 days. Most of my June calls are in the money now, bitch.

 

[75th]

WRONG 75TH...Here ya go: http://www.selectedfunds.com/pdf/SFB&H.pdf

it is true in that any average stock fund, the results will be very similar to the results of the s&p due to the s&p representing the largest 500 companies. Largest usually meaning most profitable, so the fund managers are more likely to invest in those large cappers...

Pm me if ya wish, who is your BD?

Eh I guess were both right...I have a lot of marketing material like that in my office that compares it to the S&P.

But as you said, its pretty much the same thing.

 

[gotmilk]

Depends...

TD Ameritrade is offering 3.24% for 3 month CD's on new cash accounts. After 3 months, I would be buying municiple bonds if I had under $100,000 in total cash assets.

If his IRA is sinking and the fees to exit are minimal, I would get the hell out now. You can buy stocks with decent cash dividends and make far more than you can with IRA's lately.

 

[jdynasty]

MM

Sorry your thread turned into a bitch fest.

It sounds like you just need to reallocate some funds into ones that are doing better.

Some options are international funds, mid-growth, and even bond funds.

Bond funds do not grow as fast as stock funds, but they are doing well right now due to the high cost of oil and the weakened dollar.

Normally for someone so young, and investing in an IRA or a 401k, investing in blended funds and stock funds would be the way to go as long as they are still investing into the IRA or 401k, but since this is not the case here, then some more precautions may be necessary.

MM69 is about accurate, my IRA is up around 8-9% since the first of April as well.

However, reallocations in IRA's and 401k's should be kept to a minimum, maybe at most twice a year. I have tried to keep it to one.

 

[Raptorex]

Most of the insiders are saying get back into the market hard right now, most stocks are under-valued. Times like these are when investors can become very rich.

For those of you that just use funds, this Wellington Mid-Cap fund is exceptional.

http://membersfunds.cunamutual.com/content.aspx?ID=16255

 

[Raptorex]

Wasnt I telling you to buy GLD last year?

I sold it at an even 100.


ETFs are legit, especially from a tax standpoint...but theyre not nearly as exciting as stocks or options.

PS, Ive made all my money back due to V's performance over the past 2 days. Most of my June calls are in the money now, bitch.

Bro your smart, but there is no substitute for long term experience which includes managing money through the market tanking. You will see things differently once you go through this.

V is old news

 

[musclemom]

MM

Sorry your thread turned into a bitch fest.

It sounds like you just need to reallocate some funds into ones that are doing better.

Some options are international funds, mid-growth, and even bond funds.

Bond funds do not grow as fast as stock funds, but they are doing well right now due to the high cost of oil and the weakened dollar.

Normally for someone so young, and investing in an IRA or a 401k, investing in blended funds and stock funds would be the way to go as long as they are still investing into the IRA or 401k, but since this is not the case here, then some more precautions may be necessary.

MM69 is about accurate, my IRA is up around 8-9% since the first of April as well.

However, reallocations in IRA's and 401k's should be kept to a minimum, maybe at most twice a year. I have tried to keep it to one.

I seriously appreciate all the advice and can pick up stuff from the arguments, too

His IRA hasn't been re-allocated since it was opened which is about five years ago. I did learn the rule about not playing with your funds once, put them there and leave them alone. I just thought that due to the fact he wouldn't be making ANY contributions to it for the next two years it would be better to go with something REALLY safe.

I've appreciated what everyone has said. Y'all may fight, but we got some smart folks up in here

 

[gonelifting]

I seriously appreciate all the advice and can pick up stuff from the arguments, too

His IRA hasn't been re-allocated since it was opened which is about five years ago. I did learn the rule about not playing with your funds once, put them there and leave them alone. I just thought that due to the fact he wouldn't be making ANY contributions to it for the next two years it would be better to go with something REALLY safe.

I've appreciated what everyone has said. Y'all may fight, but we got some smart folks up in here

You should actually reallocate funds from time to time after first purchasing them. Let's say for example, you want a 50% growth and 50% bond portfolio. If growth grows substantially this year, then you may have 70% growth 30% bonds. So you'll have to sell (high btw) the growth aspect of the portfolio and reallocate it into the bond part to make it an even 50/50 blend or ehatever ratio you were confortable with.

So, you do in fact need to reexamine your portfolio probably once a year or so.

It's pretty well known that 80 or 85% of the fund managers do NOT outperform the stock market. Yet people still try and beat the market because they think they can choose better. Some do, some don't. Will you choose the 15 -20% of the funds that will beat the market? No one knows until it's too late.

It would help if you posted the fund he is in.

What I recommend is something like Vanguard S&P 500 fund or total stock market fund. Even ticker symbol SPY will be good. Don't worry about "losing money now" or whatever. He's theoretically keeping this money invested for a long time and needs it to be invested and not on the sidelines.

Something like th total stock market or S&P would not need to be looked at and reallocated every year. It has grown 12% or so forever. Now that it's "cheaper" then you'll ride it through the up days when they finally come.

good luck

 

[Dial_tone]

Your son is still young enough to take some volatility so long as you think the fund is a well-managed and historically well-performing fund. If he wants to roll it over into a S&P 500 index fund, that would take some of the volatility out of it and not get hit with the penalties of early withdrawal, which are significant.

He's too young to be invested in bonds and CD's in my opinion, anyway. They are too conservative of an investment for someone so young.

I'm no money guru, but that is just my 2 cents.

Homegurl has crazy money skillz.

 

[Raptorex]

PS, Ive made all my money back due to V's performance over the past 2 days. Most of my June calls are in the money now, bitch.

You still high on your June calls bro

 

[75th]

You still high on your June calls bro

My 85s are doing alright...90s obviously arent that great.

I also have some Jan 09 100s that are doing a-o-k as well.

 

[Raptorex]

My 85s are doing alright...90s obviously arent that great.

I also have some Jan 09 100s that are doing a-o-k as well.

you got about a 40% chance on the 85s at best, get out - you made your money here.

 

[75th]

you got about a 40% chance on the 85s at best, get out - you made your money here.

Idunno...V's been on a nice run over the past few days since MA came out and said how good shit was. Im going to sell them at 88...theyre already in the money so whats the harm with letting them ride for a few more days?

 

[Raptorex]

Idunno...V's been on a nice run over the past few days since MA came out and said how good shit was. Im going to sell them at 88...theyre already in the money so whats the harm with letting them ride for a few more days?

There is very little historical data to support any move to be honest, however I see no reason why you would risk the gains from such a strong week (5/26). It is likely there will be profit taking going forward for a bit. I'd bail in the am.

 

[75th]

There is very little historical data to support any move to be honest, however I see no reason why you would risk the gains from such a strong week (5/26). It is likely there will be profit taking going forward for a bit. I'd bail in the am.

I have a sell order set if it drops to 85...but I honestly think that itll gain a point or two over the next 2 weeks. If it does it relatively quickly, that is more dinero in my pocket.

If Im wrong Ill buy you a coke.

 

[Raptorex]

I have a sell order set if it drops to 85...but I honestly think that itll gain a point or two over the next 2 weeks. If it does it relatively quickly, that is more dinero in my pocket.

If Im wrong Ill buy you a coke.

Deal, but it could be sold at opening 85, Frankfurt futures are pretty bad bro...Oil or Natural Gas!

 

[75th]

Name Price Change Mkt Cap

V 87.53 +1.46 (1.70%) 94.88B

MM69, Im convinced you are some sort of racist. There is no other reason why you wouldnt want me to make the money I did today.

My 90s were sold at 87.5. I got my 85s much cheaper so Ill hold on to them for a few.