I have a Roth IRA, but.....ANY SUGGESTIONS?

Question

About 6 months again, I opened a Roth IRA with T Rowe Price. I started out with only $1200, which is better than nothing. About 2 months ago, I received an update with what my money is doing as far as growth, and it LOST $32. My money when from $1200 to $1168 in 4 months. I have my money in the most secure fund possible, but still risky, the have it called Capital Appreciation Fund.

They showed me statistics and such, and that particular fund has NEVER ended a year with a negative interest rate. For instance, every year, the APR has been .01% and above, varying from 2% - 13% annually.

Should I trust the market to turn around? Should I not add any more money until I see growth? Any other suggestions?

All help is appreciated.

Answer 1

(upon coming back to add another book, I'm sorry to see that I have negative rating for this post- It's a shame, because the advise I gave here not only got me out of debt, but helped me get enough money to purchase apartment buildings.  I am now financially free and no longer have to work.  I hope the people reading this thinking that it's a load of c**p are in the same situation as me, not working and enjoying their passive income!!)

I also hold investments with TRowe Price.  I was also dismayed at my losses recently, so I started to learn more about what I could do.

PLEASE read this book, or listen to it on tape.  It will possibly shake your belief system in the stock market, but it will also tell you what to do to make your investment money go the farthest.  I know that most people don't bother to read books, but let me tell you, this is the most important one you can POSSIBLY read.  Let me give you a quick summary:

- at the age of 75.5, the government REQUIRES you to begin withdrawing from your IRA's and 401(k)'s.  In the year 2012, the first year of the baby boomers will be turning 75.5, and hundereds of thousands of people will be WITHDRAWING from the market- more than the ammount of people who will be putting money in.  

- during Nixon's time as president, he took us off "the gold standard" which means that our dollar is no longer backed up by anything.  In fact, the United States pays the "Federal Reserve" (who is neither a Federal entity nor a reserve) interest on every dollar they print.  This is why our dollar de-values so much when they print more- which they do CONSTANTLY.

- There ARE LESS RISKY WAYS TO HAVE YOUR MONEY IN THE MARKET THAN IN A 401(k) or IRA!! You simply don't know what they are because you have given your money to someone ELSE to control!  

- you've given your money to a "broker" (who's called a "broker" cos he's BROKER than you!!).  Have you asked your broker if he invests in mutual funds?  90% of them don't.  They are salesmen, not experts.  You need to learn who the RIGHT people are to hand your money over to.

- YOU CAN EASILY MAKE MONEY with a GOOD team of investors to help you!  PLEASE PLEASE read this book to help find out how!!!  It is by one of the leading investors in the US, Robert Kiyosaki, who has written books and partnered with Donald Trump on real estate deals.  He is the author of Rich Dad, Poor Dad, and the founder of an investing education system that Warren Buffet (the richest invester in America) advises that you use.  You can check him out at www.richdadeducation.com

The book is called "Prophecy" by Robert Kiyosaki.  Here is a link:

http://www.amazon.com/Rich-Dads-Prophecy...

Also pick up Increase your Financial IQ, same author

http://www.amazon.com/Rich-Dads-Increase...

Finally, I know that sounds like a sale.  I know that most people will not read a book that is reccomended, but please, at least borrow it from a library on tape.  It is fascinating, and within a few MONTHS, I have learned how to make money in this current market.  I am NO LONGER upset with my T Rowe Price statements.  I have a SELF DIRECTED IRA which now holds REAL ESTATE instead of stock.  BRILLIANT!!!  

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Answer 2

Since this is an IRA, the assumption is that you won't "need" the money until you retire at age 60 or 65 or 70.

If you were buying cans of magic food (It's AMAZING! It NEVER goes off!) to eat after you retire, if the price went down this week what would you do? If you had at least half-a-brain, you'd BUY MORE!

We are in a rough spot right now, just like dozens that have occurred before. T.Rowe Price's "Capital Appreciation Fund" is highly likely to return an average long-term growth of 12% a year, so if you leave your $1168 where it is, it'll be worth between $100,000 & $200,000 in 30 or 40 years.  If you add $100 a month, you'll have over a million.

Or you could move it to a "safe" investment like a 5% bond, and have $8,000...  

Answer 3

1st, You haven't lost any money since you have not taken it out.

2nd, You need to be adding to it and not just let the $1,200 you initially put in sit there.  With a Roth IRA, you can average about $467/mo for the year to max it out.

3rd, look at the market in the last 7 years, what has it done? Fluctuate like crazy.  Now step back and look at it over the last 14, 21, and 30 years.  Still fluctuates BUT it is always going up.

If steaks where on sale for 5% off, would you buy more or less? 15%? 50%? Stocks and funds are on sale up to 70% or more.  Are you going to buy more or sell what you have taking the loss you don't really have?

Answer 4

stick with it.  When the market is down, it's the perfect time to buy more shares because price per share is lower.  It's the oldest rule in investing

Answer 5

In general you should buy low and sell high.  Right now it is on sale as it is on sale the prices are going down, so yes you should keep putting money into your IRA.  This is normal, this is the business cycle of ups and downs.

The market will go back up (look at the market after 9/11).  You are investing for the long term and 4months is a very short time.  Over time it will go back up.  If you only put money in when it is going up you will do worse.