No. of Recommendations: 0
With a rollover IRA in a large fund family, you can switch from one fund to another without tax consequences. You help pay the fund manager's salary. Is he earning it?
If you roll it to a broker and buy stock, you will pay the broker a commission. Do you get advice? Do you want advice? Will you, with or without the advice of a broker, do a better job of picking stocks than the fund manager?
If your rollover is relatively small, like under $50000, and certainly if under $10000, you probably are financially ahead to leave your rollover where it is, particularly if you are with a low-cost mutual fund company.
If it is a big rollover, like over $150000, and you are quite adept at picking stocks, you may well do better on your own. A mutual fund manager must buy when people want shares of his fund, which is when the market has been doing well and prices are up. He must sell when prices are down. Janus is getting devastated. They got out of some long term holdings last year, people got big capital gains distributions and the shareholders must sell shares to pay their taxes. This forces the fund manager to sell to meet the redemptions. Within your IRA if you hold a good stock, you can decide to ride out the storm, as there are no immediate tax consquences to anything you do.
The necessity of mutual fund managers to buy high and sell low is a major reason your chances of beating 'em are really quite good.
You might, with a large rollover, roll just part of the money to a discount broker, manage it yourself, and compare your performance to that of the fund manager.
Best wishes, Chris
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.