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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75802  
Subject: Re: What to do with 401k Rollovers Date: 1/13/1998 8:18 PM
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Greetings, TomD, and welcome.

<<I recently had to roll over approximately $10,000 from two different 401k plans, and for expedience, I had the funds transferred to my broker account. The broker has suggested investing the funds in various Mutual Funds, but having recently completed "The Motley Fool", I would like to look into some other options. Now for the "New Guy" questions: Is it possible to take these retirement funds and invest them in individual stocks? If this is possible, what are the down sides to doing so? What is the best way of doing it, if it is possible and I decide to do so? Do you have any other recommendations for a "new guy"? I am 29 years old, so I don't have a problem with higher levels of risk, but I don't want to do this in the haphazard way that I have in the past. Thanks for any assistance you can give!!!>>

Sure it's possible. All you have to do is tell your broker to cash in the funds and buy stocks on your instructions instead. Check the fees before you do, though, because it may be far cheaper someplace else. If that's true, just liquidate the funds and have the cash transferred to a self-directed IRA you establish with the broker of your choice. The downside is you have to make the stock selections yourself. If you're not comfortable doing that, you may want to stay with the funds for awhile until you gain more knowledge in that area. Therefore, why not take a bit longer before you start and get some education first? The market will still be there 60 days from now. Take the time now -- not later -- to be sure about what you want to do.

To that end, IMHO you will be well-served if you toddle over to your local library, discount bookstore, or even here in the Fool Mart and pick up some more easily read, easily understood, inexpensive texts that will soon have you confidently investing in stocks using some simple systems that will take but an hour per year of your time (if you're slow) yet produce returns that put the majority of professional money managers to shame. You've already read "the Motley Fool Investment Guide." In addition, I suggest and commend the following to you: "Beating the Dow" by O'Higgins; "The Dividend Investor" by Petty and Knowles; "One Up on Wall Street" by Lynch; and "What Works on Wall Street" by O'Shaughnessey. All are well worth their low cost and the small investment in time it takes to read them. Get them and read them. Be assured you will be glad you did.

Regards……Pixy


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