Is IRA better to hold my money than mutual fund?
The way the market is now day, choppy, can't afford to lose my money?
On 2023-09-17 8:12 p.m., Scream wrote:
Is IRA better to hold my money than mutual fund?You misunderstand. An IRA is an account that you hold investments in.
The way the market is now day, choppy, can't afford to lose my money?
Things like mutual funds, stock, bonds, cash, CDs etc.
You can hold these things outside an IRA or inside.
Holding inside is generally better, because taxes are deferred
until you withdraw the money, which means that you get to
reinvest all the earnings each year, rather than paying taxes
on the earnings each year. I.e. you get to earn money on the
taxes you would have paid if the investments were made outside the IRA.
Over significant time this makes a big difference
Eventually, you will need to withdraw money in your retirement years
and then you will pay taxes on what you take out.
If you are likely to need the money in the near future
an IRA is NOT the place to hold money.
You can lose money in real terms (after inflation and taxes),
in almost any investment, stocks bonds, mutual funds, bank accounts.
I got out of the market at least 10 years ago. It is a casino.
Once you have enough money to retire, then ditch it.
On Monday, September 18, 2023 at 5:01:47 PM UTC-7, Alan Bowler wrote:
On 2023-09-17 8:12 p.m., Scream wrote:
Is IRA better to hold my money than mutual fund?You misunderstand. An IRA is an account that you hold investments in. Things like mutual funds, stock, bonds, cash, CDs etc.
The way the market is now day, choppy, can't afford to lose my money?
You can hold these things outside an IRA or inside.
Holding inside is generally better, because taxes are deferred
until you withdraw the money, which means that you get to
reinvest all the earnings each year, rather than paying taxes
on the earnings each year. I.e. you get to earn money on the
taxes you would have paid if the investments were made outside the IRA. Over significant time this makes a big difference
Eventually, you will need to withdraw money in your retirement years
and then you will pay taxes on what you take out.
If you are likely to need the money in the near future
an IRA is NOT the place to hold money.
You can lose money in real terms (after inflation and taxes),I got out of the market at least 10 years ago. It is a casino. Once you have enough money to retire, then ditch it.
in almost any investment, stocks bonds, mutual funds, bank accounts.
On 2023-09-17 8:12 p.m., Scream wrote:
Is IRA better to hold my money than mutual fund?You misunderstand. An IRA is an account that you hold investments in.
The way the market is now day, choppy, can't afford to lose my money?
Things like mutual funds, stock, bonds, cash, CDs etc.
You can hold these things outside an IRA or inside.
Holding inside is generally better, because taxes are deferred
until you withdraw the money, which means that you get to
reinvest all the earnings each year, rather than paying taxes
on the earnings each year. I.e. you get to earn money on the
taxes you would have paid if the investments were made outside the IRA.
Over significant time this makes a big difference
Eventually, you will need to withdraw money in your retirement years
and then you will pay taxes on what you take out.
If you are likely to need the money in the near future
an IRA is NOT the place to hold money.
You can lose money in real terms (after inflation and taxes),
in almost any investment, stocks bonds, mutual funds, bank accounts.
I meant, my 401k money is in a Fund, like Wanguard or American fund.
Wanguard is passive fund, no load, American is managed fund,
it has front and end load.
But it don't let me take money out that's why I was thinking to roll it
over to an IRA, where money can be moved in and out easy.
American fund made me some money, but since the interest rate rise and war,
I lost 15% value.
On 2023-09-20 6:20 p.m., Scream wrote:
I meant, my 401k money is in a Fund, like Wanguard or American fund. Wanguard is passive fund, no load, American is managed fund,I assume you meant "Vanguard"; I don't see anything called "Wanguard".
it has front and end load.
Vanguard runs a bunch of funds, but they are most famous for passive
index funds. They do have some more actively managed stuff. You didn't specify which one, so I hope it's a broad index fund like their S&P 500
one.
Capital Group runs a number of active funds under the banner
"American Funds". I have no clue which one you have, or even
if it is stocks or bonds (or a blend, aka balanced).
Active funds often outperform passive index funds over some periods,
but over longer time periods they almost always under-perform.
Partly this is because of higher fees, and since the index just
reflects the total decisions of all the active managers in the market.
If you can, I would suggest moving moving it all to one of
Vanguard's index funds.
But it don't let me take money out that's why I was thinking to roll it over to an IRA, where money can be moved in and out easy.You seem to be mistaken. You can't just move funds in AND out of an IRA. Like your 401K, when you take money out you pay taxes, unless you are transferring funds to an IRA. There are limits on when or if you can put money in.
American fund made me some money, but since the interest rate rise and war,
I lost 15% value.
The interest rate hikes hit everything, although the S&P 500 seems
to have recovered, Canada not so much. One year is not really
a long enough time to judge.
Moving money in and out of the market is a sure way to lose.
During the years that Peter Lynch famously ran the Fidelity Magellan,
it did very well and beat most other stock funds in total return.
However, a majority of investors in the fund actually lost
money because they kept moving money in and out
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