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Anthem
11-04-2011, 04:11 PM
Hey gang. I've been underwhelmed by my IRA over the past six years, and I'm trying to parse how much of it is the overall market and how much is my particular investment manager.

Let's say, for the sake of discussion, that I had $10,000 in the summer of 2005. How much would you expect that to be worth today?

Knucklehead Warrior
11-04-2011, 08:13 PM
I make a living from the stock market. I have more money now than when I started 10 years ago.

The quick and dirty answer is, sorry, it depends. I can elaborate, but I'll have to think about it some.

Here's a good test. SPY, the S&P ETF was @ 100 in 2005. It's now about 125. If you wanted to use that as your basis of comparison, then your $10k should be $12,500 now.

My guess is, you've been putting money in all along, so the calculation would be more difficult.

What is your IRA invested in, not specifically, but type of assets?

Anthem
11-04-2011, 10:45 PM
Nope, in 2005 I rolled a 401k over to a new IRA. It had 35k in it then, and it has 35k in it today.

It's in a semi-aggressive growth fund with Lincoln Financial.

graphic-er
11-05-2011, 01:56 AM
By investment manager, do you mean you have an actual person you can call up and talk to that is recommending investment strategies?

If so, then I'd say you've gotten hosed. No reason why your ROI should be at zero with an actual person watching over your money.

I've recently starting pouring over my IRA's to see if there is a better way to combat the huge market swings that we have seen this year, and the impending bubble crashes that legislation has not actually addressed. I think I'm going to take one of my funds and move it into a dividend growth fund. Because while the market values of the indexes seem to swing wildly back and forth, these companies are making huge profits. Which means dividends will follow. The more shares you own the more dividend money you will get that will be re-invested in the fund, and of course the share price still goes up or down based on Market performance gains.

I know alot of people say pick a fund and just forget about it and keep putting money in and the dollar cost average will put you ahead in the longer run, that is bad advice if you ask me. Alot of people just forgot about it and the market crashed in 2008, and everyone's 401K and IRA got cut in half.

A few years ago when I first started one of my Roth IRA's, I put some of my initial investment in Trowe Price New Era Fund, which focuses on Aggressive growth in the energy sector. I did not know much about investing, but I figure I'm young and I need an aggressive growth fund and all the oil companies were making record profits. So I thought what a good idea. Well in one years time the oil prices came back to earth and that one fund lost about 45% of its value. It really pissed me off, but taught me a valuable lesson, you have to pay attention to global and national trends when investing in mutual funds. When that New Era fund collapses like that again you better believe i'm going to move a huge chunk of money into and let it ride back up and then move my money out of it before the next oil price crash.

About a month ago we had a huge crash in the Dow Jones over a 2 day period that basically wiped about 6 months worth of gains. Just last week there was a record one day gain, followed by an even bigger loss the next day due to worries over Greece.

Tom White
11-05-2011, 08:56 AM
Nope, in 2005 I rolled a 401k over to a new IRA. It had 35k in it then, and it has 35k in it today.

It's in a semi-aggressive growth fund with Lincoln Financial.

I'm going to guess they charge you a nice fee for their "work"? That "fee" being a load (service fee) of anywhere from 5% to 7% of YOUR money, which you give them for the HONOR of having them invest YOUR money for you. Totally uncalled for.

Contemplate no-load funds from T Rowe Price or Vanguard or Fidelity. There is absolutely no reason to pay a fee to any broker for investing your money. Just study the history of each fund the various companies offer, of the category in which you wish to invest. Look at the returns in good times AND bad times, and compare how those funds performed relative to the market. You'll find something you like. Just do your homework.

Doug
11-05-2011, 09:10 AM
I don't like mutual funds (and ETFs) very much. They are still not "buy and forget" - you still need to know what's held by the fund, do the use any leverage, what rules in terms of holding size do they have, etc.

And if you have several, then you need to check and see what they have in common to make sure you are not more exposed to any given company than you really want to be.

I lost several years of accumulated savings (in my kids college funds no less) when a "safe, value based" mutual fund my broker had picked "went to zero" when the banks crashed. Seemed that "safe" to them meant "derivatives on mortgage backed securities".

I've taken a lot more interest in investing over the past 2 years. Mainly, that means reading a lot, both on the internet and books.

I would consider reading One Up On Wall Street : How To Use What You Already Know To Make Money In The Market, by Peter Lynch as a good starting point.

http://www.amazon.com/One-Up-Wall-Street-Already/dp/0743200403/ref=sr_1_1?s=books&ie=UTF8&qid=1320499303&sr=1-1

It's a little dated in terms of examples as it was written maybe 20 years ago, but the principles are very, very relevant still. And it's cheap and easy to read.

As far as web sites, I'd recommend The Motley Fool - http://www.fool.com/

There's a far bit of noise because of the large number of articles published daily, and their marketing materials can be unnecessarily over the the top, but the site is worth it. The How To Invest pages http://www.fool.com/how-to-invest/index.aspx are a great starting point. Their paid services are where I feel the real value is, though - I've tried a couple. Stock Adviser is good, even if you don't buy individual stocks, but for the analysis that goes behind their picks, the education part. If you really want to build a portfolio based on mutual funds and ETFs, their Rule Your Retirement is focused on that, and fairly inexpensive. You can try any of their services for 30 days and get a full refund.

It's easy to get distracted by the "get rich quick in the stock market" stuff. Invest sensibly. It's not the lottery. True, lasting wealth is built over the long term. I wish I understood that when I was in my 20s, but I try to get a little smarter every day.

Doug

Knucklehead Warrior
11-05-2011, 12:11 PM
Wowee!! You've gotten a TON of very good advice. I saw about 8-10 VERY good suggestions and pointers.

Hopefully now you're reaching a point where you're asking yourself, "How hard could it be to just be responsible for this stuff myself?" That's when the knowledge transfer will take place. Remember that good decisions come from experience; experience comes from bad decisions. You have a lot of both to look forward to. Unfortunately it should take you one full investment cycle to start to feel comfortable with it, i.e. one bull and one bear.

A good tip -- don't try to hammer the market when it's going up, just try not to get hammered when it's going down. My wife's IRA dipped only 5% from the top in 07 to the bottom in 09. I've never had a losing year. It CAN be done.

The learning never ends, but the time spent doesn't have to be prohibitive. Start by subscribing to at least the Wall Street Journal. A subscription delivered to your door costs less than $200/yr and it will be the best investment you'll ever make.

Sparhawk
11-05-2011, 05:29 PM
I started to get into penny stocks, but without advanced charts that you have to pay for, then it's very difficult to try and make money.

My 401k has been underwhelming as well, so I'm trying to learn to play the stock market. It would be great if I had a friend in the financial industry that could take me under his wing. In the meantime, I'm just doing research right now.

indygeezer
11-06-2011, 04:46 AM
Anyone have experience with Scottrade? I've been thinking of rolling my 401K into a Self-directed IRA and sure don't wish to pay the commissions my broker used to charge (back when I was heavily into the market).

Sparhawk
11-06-2011, 09:34 AM
Anyone have experience with Scottrade? I've been thinking of rolling my 401K into a Self-directed IRA and sure don't wish to pay the commissions my broker used to charge (back when I was heavily into the market).

I'm with e-trade.

Knucklehead Warrior
11-07-2011, 08:50 AM
I've been with Scottrade, Schwab, and Fidelity for about ten years. I use Scott for the real time watchlists, but not so much for their research. Schwab's research is top-notch; Fidelity's pretty good. That's the fundamental side.

For the technicals -- Stockcharts.com, Telechart Platinum, DailyGraphsOnline (now Marketsmith). These are tools and you have to have some. Don't be cheap about your tools. These total about $2500/yr. Some other highly rated tools would be Tradestation and VectorVest.

I also subscribe to Investors Business Daily and WSJ. I go to the library to read Barron's.

My favorite authors to help anyone get started would be Stan Weinstein, Van Tharp, John Murphy, Alexander Elder, William O'Neill.

While tempting to follow some guru's advice, I'd say your best bet is to depend on you -- Think for Yourself!
Most professional advisors match the market less their expenses. You can do a lot better than that.

If you were just getting started depending on yourself, I'd check out and read about 50 library books, subscribe to one daily financial newspaper, get the free version of Stockcharts.com and open a Schwab account for the research.

With experience you'll develop some fundamental beliefs about the market. Here are some of mine:
People buy earnings.
The market usually overreacts.
Diversify volatility, most people diversify profits.
It's all about managing risk.
Nobody knows your investing needs better than you do.
Don't try to beat the market, try not to let the market beat you.
Run from adversity.
When others are fearful, be greedy. When others are greedy, be fearful.
Get rich slowly.
yadda, yadda, yadda