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M*: Fund Pairings For Your IRA

TedTed
in Fund Discussions
FYI: Picking funds for an IRA is a little tricky. The limits on yearly contributions make it challenging to build a complete portfolio. Furthermore, it's wise to view the IRA as a complement to the rest of your portfolio rather than as a stand-alone entity. However, IRAs do have their own set of rules and implied investment horizon both on the accumulation and withdrawal sides.
Regards,
Ted
https://www.morningstar.com/articles/927344/fund-pairings-for-your-ira.html

Comments

  • catch22catch22
    Morn'in.

    This statement from the writer (Russel Kinnel is the director of manager research for Morningstar) is misleading, and I don't understand what he is attempting to portray. One hell of a discouraging statement (below in bold) for any newbie investor or others, too. Obtaining enough clear thinking about nominal/standard types of investments is much less complex than learning fluent Mandarin Chinese.

    " Picking funds for an IRA is a little tricky. The limits on yearly contributions make it challenging to build a complete portfolio. Furthermore, it's wise to view the IRA as a complement to the rest of your portfolio rather than as a stand-alone entity. However, IRAs do have their own set of rules and implied investment horizon both on the accumulation and withdrawal sides."

    Let us assume a new employee at small company "A" doesn't have any access to a 401k type plan. They choose to contribute to a Roth IRA. For 2019, if they can budget the amount, they are able to contribute $6,000. This amounts to $500/month for dollar cost averaging into chosen investments.

    I'm placing just a few investment choices that come to my mind and are readily available at the Fidelity.

    --- ITOT, U.S. centric, cost = $66/share
    --- ACWI, Global equity, cost = $74/share
    --- FCNTX, U.S. centric, active managed, cost = $13/share
    --- FSPHX, U.S. broad healthcare, active managed, cost = $23/share
    --- FBALX, U.S. moderate allocation, active managed, cost = $23/share

    I find in about 15 minutes of light thinking, several investments for a younger investor that ARE NOT tricky or leave an incomplete portfolio for growth.

    No wonder folks become turned off when considering investing.

    Have a good remainder,
    Catch
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