The Saving Advice Forums - A classic personal finance community.

Buying and Selling Roth IRA

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Buying and Selling Roth IRA

    I'm just wondering if it's feasible and/or possible to do a buy and sell strategy with mutual funds in an IRA. The reason I ask is because I'm wondering if this is smart if, say, you are already up 10% in the first 6 months of the year and want to sell and then buy again when the market dips. After selling I would put the money in a MMA or MMF to avoid any penalties.

    I have shares in VFFVX if that changes anything.

  • #2
    Is it possible? Yes

    Is it a good idea? Absolutely not. What you are suggesting is market timing. Trying to guess when the market will go up and when it will go down. That is a very short-term, short-sighted strategy. It is more akin to gambling than it is to investing. Your Roth is a retirement account. I don't know how old you are but I'll assume you have at least a couple of decades before you will be touching that money. You need a long-term investment plan to match that timeline. Buy regularly over time and leave it alone. Let it grow for years and decades, not weeks and months.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


    • #3
      Originally posted by disneysteve View Post
      Is it possible? Yes

      Is it a good idea? Absolutely not. What you are suggesting is market timing. Trying to guess when the market will go up and when it will go down. That is a very short-term, short-sighted strategy. It is more akin to gambling than it is to investing. Your Roth is a retirement account. I don't know how old you are but I'll assume you have at least a couple of decades before you will be touching that money. You need a long-term investment plan to match that timeline. Buy regularly over time and leave it alone. Let it grow for years and decades, not weeks and months.
      Thanks disneysteve!

      Comment


      • #4
        Originally posted by keelerjr12 View Post
        I'm just wondering if it's feasible and/or possible to do a buy and sell strategy with mutual funds in an IRA. The reason I ask is because I'm wondering if this is smart if, say, you are already up 10% in the first 6 months of the year and want to sell and then buy again when the market dips. After selling I would put the money in a MMA or MMF to avoid any penalties.

        I have shares in VFFVX if that changes anything.
        I wouldn't buy and sell mutual funds. Mutual funds are designed to be a longterm investment. Buying and selling individual stocks within a Roth would be more feasible. You could avoid taxes and capital gains of anykind and only be subjected to commission charges. That said, buying and selling stock (i.e. trading) is a tricky thing to do. Most people that try it go broke.
        Brian

        Comment


        • #5
          "Buy and hold" is going to be e heck of a lot safer -- and better -- than "buy and sell."

          Stay the course.

          Good luck!

          Comment


          • #6
            I have stocks in both a Roth IRA and a regular IRA; I don't buy and sell in them but I have 3 stocks in each and they are DRiPs (I use TDWaterhouse - I tried Scott but they do not drip). Since I opened the accounts in 1999 I only traded out of 3 positions and into 3 for replacement. When CAT was at $110 I almost sold off 50% because it was over 50% of my stock position - if I had traded out at $110, I would have bought back in at $78 but I am satisfied with my position. My drip bought more stock at the cheaper price and I sleep well.

            I started the accounts back when Dogs of the Dow was all the rage - I just never got out of them.
            Last edited by GrimJack; 01-11-2013, 08:23 PM. Reason: darned typos
            I YQ YQ R

            Comment

            Working...
            X