IRA — investments risky?
Terry, I am 77 yrs. old. I have an IRA of approx. $720,000 with Fidelity. They have my account in 32% stocks, 67%bonds and 1% misc. My account has gone down $38,000 since January 13.
This is suppose to be a conservative account. Any suggestions?
Thank you very much!
Terry Says
Well, that depends on “which” stocks they own? Is it a conservative stock fund — perhaps an equity-income fund? I wouldn’t worry too much about the stock portion.
It’s the bond portion that troubles me! When interest rates rise, bond prices fall. After all, who wants your old low-yielding bond if new bonds are issue with higher rates?!
If it were my account at age 77, I would ask them to sell half the bond portfolio now, and just put it in a money market fund. And I would ask them to start by selling the fund with the longest average maturity of bonds in the portfolio, and also the fund with the lowest quality bonds.
Just on general principles, I think you’ll sleep better knowing that one-third of your portfolio is absolutely safe (except for inflation eating away at it)– and the stocks are there to balance things out!
By the way, it’s YOUR money — so if this seems right to do, don’t let the advisor talk you out of it!
