[net.invest] IRA Choice

wmartin@brl-tgr.ARPA (Will Martin ) (01/18/85)

Anyone want to offer any recommendations for buying an IRA right now ($2000
lump-sum, possibility of adding more later)? I would think that I should
be able to expect about 12% return on investment; it seems like most CD's
and other funds are paying much less, though. Nearest I've seen is a
48-month CD at 11.75% from a credit union (but which charges annual fees,
which reduce the yield). I've been looking at brochures for bond funds, too.

I went ahead and got my wife a "Royal Neighbors of America" annuity for
her 1984 IRA, because she wanted it; the organization has been around for
many years, and she and her family have long had insurance from them.
They said they paid 12% last year. Haven't decided if I should get myself
one from them or somewhere else. I've been diversifying each year so far...

Will Martin

USENET: seismo!brl-bmd!wmartin     or   ARPA/MILNET: wmartin@almsa-1.ARPA

jhull@spp2.UUCP (01/23/85)

In article <7510@brl-tgr.ARPA> wmartin@brl-tgr.ARPA (Will Martin ) writes:
>Anyone want to offer any recommendations for buying an IRA right now ($2000
>lump-sum, possibility of adding more later)? I would think that I should
>be able to expect about 12% return on investment; it seems like most CD's
>and other funds are paying much less, though. Nearest I've seen is a
>48-month CD at 11.75% from a credit union (but which charges annual fees,
>which reduce the yield). I've been looking at brochures for bond funds, too.

If you're willing to spend some of your time looking after it,
investigate a thing called a "self-directed IRA."  It lets you put
your money where you want to and move it around easily.  Main
restriction is you can't take it out (just like any other IRA).

-- 
					Blessed Be,

 					Jeff Hull
 {ihnp4}trwrb!trwspp!spp2!jhull		13817 Yukon Ave.
					Hawthorne, CA 90250

jam@ho95b.UUCP (Joe Malecki) (01/24/85)

Probably one of the best vehicles for an IRA for a person in his twenties and
thirties is a growth mutual fund.  That way you get the advantage of the
growth of the securities in the fund, along with the distributions of any
dividends.  If you want to see the dollar amount you have in the fund grow
instead of just the long upward trend in the value of the stock prices,
consider a "growth and income" mutual fund.  In addition to stocks, they
usually invest in fixed obligation investments such as bankers' acceptances,
CD's and the like. Annual returns from growth mutual funds is almost always
better than straight interest.  If the market does well, your return can be
quite high.  In the boom market year of 1983(?) some funds posted returns of
60%, while even the dogs were around 20% or more.  Interest rates on CD's
were only around 13% or so.

Basically the strategy for a young person is to achieve capital GROWTH.  As
you get older you want to start pulling in a little so that your nest egg is
not subject to swings of the market. Finally, you want to become risk-free as
you approach and enter retirement. Then you concentrate on INCOME from, say,
treasury securities or GNMA funds. 

The reason you want a self-directed IRA is so that you can follow the
long-term strategy outlined above. You can always do better in the long run
by diversifying  in a (or several) mutual fund instead of getting only
interest from a bank CD.