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Author: humpback Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75781  
Subject: Investing lump sum IRA Date: 1/10/1999 3:27 PM
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Hi

I'm a little new at this. Just a little history. I received an early retirement lump sum package on 8/1/98. Since I was bombarded with suggestions on how to best invest it and having no clue, I put it in a money market IRA with the financial services division of my Credit Union (the only place I could think of to safely place it until I decided what to do with it).

I tried to decide but I couldn't bring myself to put any of it in the myriad of mutual funds that were suggested. I guess it was because I am a control freak and the thought of having all these people in control of my money and being somewhat locked in to the decision for years, just made me know that while I wasn't sure what to do, that was definitely not it.

Then the convential wisdom that retirement funds should be 60% stocks, 30% bonds, 10% cash! Well I explored the bond market, T-Bonds, municipal bonds, REITs and the more I learned, the more I thought, why would I want to put my money away for 2,4,6,15 years only to get 5% back? I can get that in my money market fund and still have access to my money.

I had explored the Fool last fall as I was researching everything else and thought it made some sense but still scary. However, my son gave me the book again last week ( I was home sick with a cold) because he knew that my New Year's Resolution was to make a decision to do something with the money this month. So I took the time to read and reread and wander all over your website.

Now it is not so scary. I made investments in a few good stocks last year and they are performing well. My son and daughter and I are also researching some other ones that look promising.

So now being Foolish seems like a strategy that I can accept and am actually excited to be learning about being able to take care of my own retirement portfolio, which is still bordering on new to me.

Thanks in advance for your valuable information.

Now I have a couple of questions?

Discount Brokers

Currently I am paying $40 a trade. Not bad for an occasional trade for 100 shares. But too much for Fool 4 trades and the others that I will be initially making this year. I've look at a few brokers so far and have more info coming. Is a etrade broker like DATEK a possible alternative? I almost always have access to the Net.

Also, for retirement I think I read maybe invest 30% of the money in the Foolish 4. Is that in the ballpark?

I currently have 20% invested in Lucent (200 shares), Cisco (200) and @Home (100).

I know I will be taking baby steps this year but would really appreciate your thought on my plan so far.

Thanks so much.

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Author: gp703 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7775 of 75781
Subject: Re: Investing lump sum IRA Date: 1/10/1999 4:54 PM
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< Then the convential wisdom that retirement funds should be 60% stocks, 30% bonds, 10% cash! Well I explored the bond market, T-Bonds, municipal bonds, REITs and the more I learned, the more I thought, why would I want to put my money away for 2,4,6,15 years only to get 5% back? I can get that in my money market fund and still have access to my money. >

Not sure where those numbers came from. You don't say old you are or how long you have until retirement. One convention is to subtract your age from 100% and put that money in stocks and the rest in bonds. If you have a long time until retirement (20+ years) then you may want to boost up the stock percentage. If your heart drops if the market goes down 15%, then put more money into bonds.

I have been using Datek for my online trades. All trades are $9.99 for any amount of shares up to 5000 and this price is good for market and limit orders. Most of the other online companies only make their special price available for market orders. Datek, however, doesn't support option trading.

Best of Luck

GP

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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: 7776 of 75781
Subject: Re: Investing lump sum IRA Date: 1/10/1999 4:57 PM
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Greetings, Humpback, and welcome. You wrote in part:

<<So now being Foolish seems like a strategy that I can accept and am actually excited to be learning about being able to take care of my own retirement portfolio, which is still bordering on new to me.

Thanks in advance for your valuable information.

Now I have a couple of questions?

Discount Brokers

Currently I am paying $40 a trade. Not bad for an occasional trade for 100 shares. But too much for Fool 4 trades and the others that I will be initially making this year. I've look at a few brokers so far and have more info coming. Is a etrade broker like DATEK a possible alternative? I almost always have access to the Net.

Also, for retirement I think I read maybe invest 30% of the money in the Foolish 4. Is that in the ballpark?>>


Congratulations on taking charge in a Foolish way. Yes, a discount broker is indeed possible and helps keep your trading costs way down. Most Fools use one rather than pay the high fees of full service brokers. Why pay for a service you don't use? After all, Fools are doing the research and analysis plus making the decisions, so we don't pay for something we don't get.

How you allocate your money is up to you. There is no magic number before or after retirement. We all struggle with that decision, but it basically boils down to how much risk we're willing to take. I suggest you read the series of 23 posts on retirement investing posted on this board starting at http://boards.fool.com/registered/Message.asp?id=1040013000079000&sort=postdate for some thoughts on the subject. The "Retired Ralph Redux" missives should be of particular interest to you.

Welcome aboard and Fool on!

Regards....Pixy

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