$7,000. Where to stick it?

[ua_guy]

I haven't made my IRA contribution for 2024 yet. Given the likely rocky road ahead for markets and the economy, where might be a good place to park it?

[disneysteve]

If you have a long term horizon, invest it in the market according to your asset allocation.

[EasyMoney00]

Under your mattress? What is the rest of your IRA invested in? The s&p is up around 20% YTD, so you missed that. If you invest in individual stocks, then who knows.

[ua_guy]

I'm not sure that's such a great idea. A lot of my broader funds are healthcare-related and I am predicting less than average performance for those companies. So for $7k I'm thinking shorter term. Bonds? Not t-bills. CD's aren't doing much now. Or, what would be a market or industry slice that's expected/likely to gain significantly?

[myrdale]

ua_guy, it is my personal opinion that concentrating on contributing consistently is the most important step, then concentrate on maxing it out after that. Technically you have until April 15, 2025 to contribute for 2024, but why wait?

I like the concept of paying yourself first. Not blow money, but future retirement. At the start of each year I try to max it out as soon as I can, typically by the end of March.

Would it be better to wait until the market is down? Maybe. But once the money is in there, its done and I can move to my next financial goal for the year.

[disneysteve]

People have been waiting for years now for the “overpriced” market to come down before investing. In the meantime the economy has been booming for the past few years and the market has just continued rising. Those folks missed out on outrageous growth.

As long as this is money you won’t need for at least 5 years, put it in the market to whatever degree fits your AA. Will it lose value short term? Probably, because the election results will lead to high inflation, high unemployment, and lousy returns for a few years, but it will recover with time.

[myrdale]

People have been waiting for years now for the “overpriced” market to come down before investing. In the meantime the economy has been booming for the past few years and the market has just continued rising. Those folks missed out on outrageous growth.

As long as this is money you won’t need for at least 5 years, put it in the market to whatever degree fits your AA. Will it lose value short term? Probably, because the election results will lead to high inflation, high unemployment, and lousy returns for a few years, but it will recover with time.

But shouldn't the priority be on maxing out his IRA before investing else where?

[EasyMoney00]

As long as this is money you won’t need for at least 5 years, put it in the market to whatever degree fits your AA. Will it lose value short term? Probably, because the election results will lead to high inflation, high unemployment, and lousy returns for a few years, but it will recover with time.

Since you're positive high inflation, high unemployment and lousy returns are coming for the next couple years, where do you suggest sticking your money? What are you doing with your portfolio since the market is going to be a slug?

I saw the feds just lowered interest rates .25 so savings interest is slowly going down. What would you recommend?

We have around $350k in savings collecting interest for a rainy day. It represents a small percentage of our portfolio. Do you not see the market performing better than 4% come January?

[disneysteve]

But shouldn't the priority be on maxing out his IRA before investing else where?

Absolutely. Max out the IRA and invest the money in that account. That's what I meant.

[disneysteve]

Since you're positive high inflation, high unemployment and lousy returns are coming for the next couple years, where do you suggest sticking your money? What are you doing with your portfolio since the market is going to be a slug?

I saw the feds just lowered interest rates .25 so savings interest is slowly going down. What would you recommend?

We have around $350k in savings collecting interest for a rainy day. It represents a small percentage of our portfolio. Do you not see the market performing better than 4% come January?

I wish I knew. Historically, the market/economy does better under Democratic leadership, and especially with a divided Congress. With Republican leadership across the board, history tells us to expect poorer results so I think we're in for a few years of under-performance. That isn't necessarily terrible; it's just not as good as it would be had the election gone differently. So maybe 6% instead of 9% or something like that. I don't have the charts in front of me.

What I'm doing isn't really useful to many others as I'm already retired so our situation is different. We're no longer in the accumulation phase; we're in the spend-down phase. I've already reduced our stock allocation a few points this year partly in anticipation of a possible shift in leadership but also because "once you've won the game it's okay to stop playing". We don't need to take as much risk with our money because we have enough to sustain us for the rest of our lives. If I was younger and still working and saving, I'd probably just keep at it without any change. Four years is a blip over a lifetime.

[ua_guy]

But shouldn't the priority be on maxing out his IRA before investing else where?

I make my annual contribution max to a 401a and 403b first. I also have to consistently save for property taxes and extra income taxes, property taxes due April and October, so the IRA is just a boost.

[Jluke]

The key is to get that money into your IRA account.

leave it in the settlement fund if you’re hesitant.

what is currently in the IRA?

I have been using vanguard balanced fund (VBIAX) the last 4-5 years and I don’t even think about market movements.

[LivingAlmostLarge]

Just put it in the IRA and wait if you are hesitant but at least it's there.

[ua_guy]

Just put it in the IRA and wait if you are hesitant but at least it's there.

It's already there, it's just parked in cash for now. The CD is done, it was the last one - I had a total of 3 - it was just called this week. The healthcare fund, VGHCX, is sluggish right now, only 18% over the last year. That's the one I'm thinking I'll swap for something else. Someone mentioned I should look into Vanguard admiral shares. Bigger buy-in for reduced expense? I don't know much about them though.

I'm not usually a fan of Target Date funds but the two 2045's I selected have been performant. 28% and 29% over the last year, respectively.

[disneysteve]

You want to get out of a fund that earned 18%? I’d suggest rethinking that.