How flexible is Vanguard IRA?

[kimiko]

If I choose a fund for my ROTH like the Target Retirement 2045, but I anticipate a market drop and would like to change it to a different fund, can I do that? Has anyone changed the fund in their IRA?

[kv968]

Re: How flexible is Vanguard IRA?

You can transfer your funds from one to another but then you're trying to time the market and many studies show that in the long run that's a losing proposition. Since your time frame for investing is so long you should ride out the ups and downs in the market and just leave the fund alone. Chasing the hot sector or moving because you think the market is going to go up or down isn't the way to go. If you're that worried about the rise and fall of the market your risk allocation to stocks may be too high and you might want to look into a more conservate fund.

[kimiko]

Re: How flexible is Vanguard IRA?

I'm not exactly chasing the hot sectors but I have been looking through the performance of various funds, index in particular, and noticed how when the tech bubble bust, the fund almost revert back to the original amount invested. That would mean years were wasted. I also remember seeing it coming and thought to myself that I would have pull out had I had any investments.

So if I can see something as huge as that coming, I would like to re-allocate assets to something more conservative to ride it out instead of suffering the loss. I've looked through the Vanguard Roth page and didn't see info on changing funds, only tranfering money between them.

[kv968]

Re: How flexible is Vanguard IRA?

Although I'm not really sure but if you can exchange money between funds you should be able to just transfer the total amount to another fund closing out the original. Just give Vanguard a buzz, they have some really helpful service reps that could give you a concrete answer.

And I hate to say it, but moving funds because you can "see something coming" is in a way chasing the hot sector. Well, not chasing, but running. Don't get me wrong, I totally understand what you're talking about because I get the same feelings at times, but who's to say what the maximum or bottom of a sector or class is? Sure something could be getting really high such as the DOW and S&P 500 hitting new highs, but does that mean you pull your money out and wait for it to fall. What if it doesn't? And if it does, when do you put the money back in? And that's not saying that you should stick with a clunker fund forever hoping that it'll come back, but you just have to be careful with pulling in and out of funds when it seems like the market is going to change.

[kimiko]

Re: How flexible is Vanguard IRA?

I don't mind small changes much, I'm not much of a runner and this is a very long-term investment, but obvious large change with years of public warning is something I would like to avoid. I'll give them a ring and see what they'll say about it. Thanks

[kv968]

Re: How flexible is Vanguard IRA?

My pleasure. Let's us know what they say

[Broken Arrow]

Re: How flexible is Vanguard IRA?

I'm not sure about Vanguard, but my investment firm will allow us to change our portfolios about 4 times each year. Not that I plan to chase anything, but it's nice to know since I prefer to rebalance the portfolio myself.

[creditcardfree]

Re: How flexible is Vanguard IRA?

Read the prospectus of the funds you are investing in. Any limitations on exchanges are spelled out there. There is amazing information at your disposal in the prospectus.

[Aleta]

Re: How flexible is Vanguard IRA?

I had the same question when I spoke with them. From what I could understand, if you pull your money out of a fund, there is a waiting period for you buying back in. That is to discourage day traders. Call them and ask. Maybe, you could get into something a little more conservative and you'd sleep better as well. One thing that we all know that the market will definitely go down and it will definitely go up.

[disneysteve]

Re: How flexible is Vanguard IRA?

It is very easy to move money from fund to fund with Vanguard. You can do it online quite easily.