Where do you put your IRA?

[GasBandit]

Not asking for numbers here, but curious as to where other halforumites choose to invest for the long haul. Mutual funds? Specific stocks? Physical precious metals? Cash in a sock under the mattress?

I guess I'll start. I've got every drop of my IRA in PRWCX - that is, the T. Rowe Price Capital Appreciation Fund. Fidelity rates it 5 stars, but I'll not pretend it was some genius research that led me to it - my Dad got me started on a Roth IRA when I graduated as a grad present, and that was the fund he chose.. and I've just kept it ever since, contributing what I can. I wasn't even smart enough to get out of in in 2008 before the crash, but really, who was?

Lately it's broken its 1 year trend floor (which seems bad to me) so I'm wondering if it might be good to move to something else, though.

 

[Dave]

Ireland.

 

[PatrThom]

I had a Roth IRA and a not insignificant amount of personal investments. I was probably averaging 7-12% appreciation/year.
It's all gone now. Life'll do that.

--Patrick

 

[Terrik]

Ireland.

 

[drawn_inward]

In the corner.

 

[sixpackshaker]

Ireland.

Derry.

 

[Dave]

I don't have enough money to invest. I have been telling myself "maybe someday" but I don't think that day will ever come.

 

[bhamv3]

A long time ago, I did an interpreting job for a financial institution. I remember sitting in on one of the interviews, where a bunch of Taiwanese journalists interviewed this guy, a European who worked as a high-ranked member of this American financial company. Near the end, they asked him where he, personally, put his investments for the future. He hemmed and hawed, and suggested the usual obvious answers, like real estate and bonds. He also said that it may be worthwhile to invest in funds related to water resources, because water would be an increasingly scarce resource in the future.

And then this particular financial company suffered a calamitous thrashing in the 2008 financial crisis, so perhaps we should take the advice of this particular high-ranked member with a grain of salt.

 

[papachronos]

I wouldn't worry about one year trends when it comes to retirement accounts. This money will be locked away unavailable to you for the next thirty years, so play the long game with a very diversified portfolio, and don't worry about the day to day (or year to year) ups and downs.

Also, the money you pay for a good certified financial planner is quite often one of the best investments you could ever make. Don't just go off of internet reviews, though. Get a referral and ask for references. A bad financial planner could ruin you.

 

[GasBandit]

Heh, I don't know if I have a diversified portfolio or not. I only own that one fund, but as a mutual fund, it is by very nature spread out among umpteen-fortyish different individual stocks.

My brother's apparently become a financial planner... he's been bugging me to let him handle my retirement finances.. but I dunno, do I really wanna turn that over to the little dweeb I used to roll up in a blanket and put in a closet for half an hour?

 

[Shakey]

My brother's apparently become a financial planner... he's been bugging me to let him handle my retirement finances.. but I dunno, do I really wanna turn that over to the little dweeb I used to roll up in a blanket and put in a closet for half an hour?

I don't know if I'd ever let a family member handle my finances. For no other reason than if something goes wrong, it can ruin your relationship.

 

[drawn_inward]

We will start investing when our debts (undergrad!!) are gone. They are slowly decreasing, just not as fast as I would like. I actually have a savings account now, which is a nice change of pace. We're actually really lazy with our money and it will probably bite us in the ass someday.

 

[PatrThom]

I would happily put together a thread about investment, but it would change almost as frequently as a "build your own computer" thread. My current issues are 100% related to lack of capital, rather than an inability to manage my assets.
Putting together any really useful advice is difficult (and why you pay a professional planner) not only because the market goes all over the place, but because even the non-market sectors keep switching importance. Look at what happened to cocoa, for instance.

--Patrick

 

[Null]

Well, it used to mostly be in the Maze Prison outside Belfast, but towards the end it was in Portlaoise and Castlerea.


No, wait, wrong IRA.

 

[Thread Necromancer]

Ireland.

I ventured in here to just make comment that I can NEVER read "IRA" without thinking "Irish Republican Army." It is simply not possible. I can be reading a financial journal or book, 100 percent pure investing content and my mind still immediately goes to Ireland. EVERY. SINGLE. INSTANCE/TIME. I know that it's not what the thread is about so I haven't come in yet to derail.

I'm glad to see that there were several others that beat me to it and I'm not the only one.

 

[Necronic]

First thing to appreciate with investment strategies these days has to do with correlation. For a number of reasons that I won't go into (and don't understand) the stock market has become highly correlated in recent years. This means as daddy dow rises so does everything else, and vice versa. With that in mind, appreciate that it is hard for funds to reliably "beat the market". Many funds are doing good if they can just keep up with the indexes.

So, instead of beating the market you need to minimize your losses to fees. And fees can vary wildly between funds. What are the lowest fee funds? Index funds. These funds are passively managed and only try to match the market, which is relatively easy for something like the S&P 500. These are imho the baseline investment people should use. I believe I use the S&P 500 Vanguard fund or something like that for one of my accounts. Works great. Granted the stock market has been pretty anemic this year, but my S&P index fund has actually beaten out the actively managed plan I am forced to use at work.[DOUBLEPOST=1414072991,1414072628][/DOUBLEPOST]Double checked my account, I have the Schwab S&P 500 index fund. Fun facts:

your fund has netted 4.99% for the ytd on your graph, with an expense ratio of 0.71 %

the S&P Schwab has done 5.86% with an expense ratio of 0.09%.

So, not only did your fund fail to "beat the market", or even keep up with the market, you are paying higher fees.

Also, as for the dip under the line you are pointing out, this isn't necessarily due to the fund itself, this is due to the stock market as a whole, which has had a particularly bad last couple of weeks. Not sure exactly why, I guess the continuous series of crises we have been having globaly are finally being felt in the stock market.

 

[GasBandit]

Well, betting this week's 10% correction was temporary and it would bounce back, I managed to make this year's contribution in the trough (which is a trick, my broker is fidelity and they take DAYS to process trade orders online). So now that it's rebounding I snatched a quick boost. Now so long as it keeps going up, should be a nice addition.

 

[GasBandit]

So, not only did your fund fail to "beat the market", or even keep up with the market, you are paying higher fees.

I grumble about the fees involved with it for sure. I've also seen a couple very noticeable moments in the last year where this fund has gone down more in a correction than the market in general (this latest dip was one such time), or taken a dive when the S&P shot skyward. Which is why I've started sniffing around for other options.

 

[fade]

I think the "some reason" behind correlation is the rise of high speed microtransactions, with AI tied to indices like Dow. And there's always, always the psychological aspect of the market. More people are in control of their funds and base decisions on general indices.

I gladly pay Fidelity to handle this stuff for me. I don't really want to invest (ha) in learning too much about how this stuff works. I do have an IRA that I specifically play with, and I've done pretty well. I put it in tech heavy risky mutuals lately. Recession or no, everyone still wants the latest toy. I have only gone after specific things a few times, though. I put some into graphene development a while back, for example. If that pays off, it will pay big. But there's a strong risk that they'll never find a good way to commercialize it before something else comes along.

 

[GasBandit]

Nuh-nuh-nuh NECRO!!!

So, even after all this time, I'm still in PRWCX. True to Necronic's prediction, the S&P 500 has outperformed it. And once again, I'm wondering if I should sell it.

Every year for the past 3 to 4 years, PRWCX has experienced a non-trivial correction around December (which may be just part of the market as a whole), but now I'm noticing some unsettling parallels between its performance for 2015-16 and 2007-8.

Now, granted, what happened in 2008 wasn't this fund's fault exclusively. But I'm really starting to think about selling this off and sitting in a money market fund until 2017.

 

[GasBandit]

Also, I'd be interested to know if anybody's got any strong feelings about RYCIX.

 

[Hailey Knight]

I figure when I get too old to take care of myself, I'll just feed myself to a wild animal.

 

[GasBandit]

I figure when I get too old to take care of myself, I'll just feed myself to a wild animal.

Gonna go to the zoo and punch a polar bear? I can kind of identify. In dark moments I fancy making my retirement plan an explosives vest on a mercury switch, a shotgun, and a trip to city hall.

 

[PatrThom]

Every year for the past 3 to 4 years, PRWCX has experienced a non-trivial correction around December (which may be just part of the market as a whole), but now I'm noticing some unsettling parallels between its performance for 2015-16 and 2007-8.

Many market corrections happen at/near the quarter boundaries, I see it a lot in October (my guess is end of fiscal year for many businesses) and March (tax time, investors raise cash/divest holdings).
Regarding "parallels," you can't ever depend on a pattern. EVER. Unless you can link that pattern to an actual thing that happened, the fact that it exists is meaningless.

an explosives vest on a mercury switch

NC Momentary should be good enough. Why spend extra for something you're only going to use once?

--Patrick

 

[GasBandit]

NC Momentary should be good enough. Why spend extra for something you're only going to use once?

--Patrick

Because I can't take it with me, am no longer leaving anyone behind, and I'd like them to have to have one more thing for the hazmat guys to clean up.

Many market corrections happen at/near the quarter boundaries, I see it a lot in October (my guess is end of fiscal year for many businesses) and March (tax time, investors raise cash/divest holdings).
Regarding "parallels," you can't ever depend on a pattern. EVER. Unless you can link that pattern to an actual thing that happened, the fact that it exists is meaningless.

So I take it you wouldn't subscribe to the "When the downward line of resistance crosses the previous line of upward support, it's time to sell" method?

 

[blotsfan]

Man, I know this great penny stock thats going to go up a ton soon. You should all buy it as well as get all your friends to invest before its too late.

 

[PatrThom]

I take it you wouldn't subscribe to the "When the downward line of resistance crosses the previous line of upward support, it's time to sell" method?

I subscribe to "Know what you're buying before you put any money into it, keep an eye on it, dump it if it looks like it's never going to go anywhere."

--Patrick

 

[Ravenpoe]

I invest all of my spare earnings in Hearthstone cards...

 

[Hailey Knight]

Gonna go to the zoo and punch a polar bear? I can kind of identify. In dark moments I fancy making my retirement plan an explosives vest on a mercury switch, a shotgun, and a trip to city hall.

You and I have different aftermath goals . I want less for anyone to clean up, you want much much more.

 

[Denbrought]

Oh hey, financial thread.

> My Roth and Trad IRAs are invested in Vanguard's Target Retirement 2055 fund (MUTF:VFFVX, EP 0.16%). I glance at them maybe yearly? At some point I'll switch to managing them instead of using a mutual fund, but the automated rebalancing and access to the lower EPs for each component is hard to beat until I get to a magic number ($10,000 * (100/desired-bond-exposure-as-percentage), assuming I value my time at 0). Annoying that I can't tweak my bond exposure (I'd rather be closer to 5 than 10) but meh.

> My HSA has terrible investment choices (mostly over-managed under-performant crap). There were 10-20 shitty funds and an S&P clone--Columbia Large Cap Index Fund (MUTF:NINDX). 100% of my HSA is there.

> My 403b (think 401k) I rebalance 1-4 times a year or so. The all-in-one funds offered for it were crappy, so I made my own package using Spartan funds. Probably not changing this allocation for a good while. I can't add more money to it since I left the job, but I don't want to roll it over to a Trad yet.

• 32% FSTVX (sptn tot mkt idx)
• 8% FSEVX (sptn ext mkt idx adv) Added to the above this is equivalent to a true Total Market index
• 40% FSIVX (sptn intl index adv) Cheapest global market stock
• 15% FSITX (sptn real es idx adv) REIT
• 5% VITSX(sptn us bond idx adv) US Bonds

Which roughly works out to what my goal is/was: 50/50 exposure to U.S. and international stocks, 5% bonds where possible, 5-20% non-stock/bond equities.

> My taxable account doesn't have much in it yet, due to fortunately having had access to tax-advantaged spaces for the longest time. However, for this year I have no 401k/similar, so anything not going towards IRA or short/medium-term savings will probably end up here... That means I'll have to look into tax-efficient investing sometime this summer.

What is in my taxable investments is an "entertainment" investment. I dropped what I was going to spend on improving my gaming computer (a few hundred bucks) into NVDA and AMD to both piss myself off (investing into direct competitors) and to bet against myself on whether I could regularly check the investment and avoid pulling it out (discipline and self-rage, good times). Also because I didn't really need a better graphics card or whatever.

The first year was rough...

But it paid off.

Probably taught me the wrong lesson, since my event horizon for investing is 20-30 years, not 2, but whatever. Still haven't decided whether to cash out and move to a more diversified investment, or to let it ride indefinitely for kicks. It'll heavily depend on where this year goes for me and my SO, employment-wise.

 

[Denbrought]

Decided to exit the AMD/NVDA experiment if/once their value reached (3 x cost of positions) + cost of exit, which happened mid-day today. Moved everything to VTI/VXUS (roughly equal parts), which is where my taxable money is at the moment. Vanguard ETFs are pretty great.

 

[GasBandit]

PRWCX has failed 3 times to break its line of resistance on its current downward trend, after breaking its uptrend line of support 2 years ago (which caused me to worriedly start this thread). If I'd gotten out at that time, I'd have about the same amount now as then, as the decline has been more or less slow, with a recovery after every big dip (but as I said, never breaking its line of resistance).

What has me worried is that last time it broke its line of support and then failed 3 times to break its line of resistance was 2006-2008. And then, of course, the crash came along and erased all gains for the past 8 years.

On the one hand, everybody and everything tells me to just hold my IRA and don't move it around. On the other... nnnnnyyyghh.... that chart makes me think another freefall is in the works. Problem is, if I get out of PRWCX, I'm out. They're not taking new investors anymore.

 

[Denbrought]

(Everything below has implicit "I recommend", "From what I've learnt", and "I have no idea what I'm talking about go ask a fee-based fiduciary financial advisor and not a foreigner")

What are your other investment options? Particularly check their 1/5/10 year performance, expense ratio, and composition, and compare them to the golden-standard-dirt-cheap mutual funds and indices (a list can be provided if needed), as well as to PRWCX.

Stop reading into trends, lines of support, etc. It all boils down to one of these cases:

• a. Bullshit and wishful thinking, about as useful as reading bones for fortunetelling.
  
• b. Sound theory, which the far-quicker-than-you machines and far-smarter-than-you quants have squeezed every penny of use out of.
• c. Unproven theory, which may or may not be right, but you might as well be betting on horses by trusting one analysis and not another.

Also remember that someone can easily write a model for anything (disease, stocks, elections) that back-tests as well as they want. The true test is whether the model, without alterations, can deal with the future, or simulations of it (such as monte carlo sims).

It's much easier to try and copy the market (or the chunks of the market that you trust) and follow it, rather than trying to outsmart it.

Decide on your investment horizon (in years), a risk exposure, and try and make as few complicated choices as possible. Here's a pretty good (and streamlined) guide from the Bogleheads wiki.

If you feel PRWCX is too risky (being a roughly 65/35), then maybe you should look at lowering your exposure to stocks. This will decrease how much gain you see from market increases but could decrease losses as well. I'm sitting at roughly 90% stock exposure altogether, but that's a conscious decision on my part.

 

[Necronic]

Technical Analysis is the pseudoscience of finance, best to avoid it.