Need investing advice???

Question

I have a ROTH IRA which is a bunch of Putnam funds such as voyager, growth and income, international equity, class A and B. Over the past several months, I've been losing money in it. I have this set up with a bank called Wachovia. I cannot get in touch with the financial advisor - he never returns calls. Should I change this IRA around in any way? And what does it all mean? The funds are investments in big companies such as Microsoft, Walmart, Lockhead Martin - mostly companies I hate but you'd think they'd be making money so what is the problem? also, should I keep putting money into this IRA right now while it's losing money?

Question #2 - Sorry this is long, I know.

My savings account with my back - the interest really sucks. It's at a whopping 1 percent. CD's are no better.

Where should I be putting my money. My financial goals are to accumulate as much as I can. Who should I talk to about this?'Thanks.

Answer 1

DO NOT QUIT PUTTING MONEY IN YOUR IRA. Sorry for yelling...but right now is EXACTLY when you want to be investing. You will be getting 2 to 3 times as many shares as you would in an "up" market for the same amount...when the market returns you will have an even larger increase. Any expert will tell you, that if you can, try to double what you're investing right now. Say a share was selling for $10...and now it is $5...you're getting 2 for the price of one with a much greater upside.  While you may see a bit of a downturn in the near future, you will see a significantly larger gain when you hold onto this for a few years. Savings are always good to have on hand...so keep using this tool as well....you should be able to get a slightly better rate than that though....Wachovia is having their own problems right now...try to find someone that will actually take your calls...a broker shouldnt treat you that way. If you want, you can even open an e-trade (or any oher online brokerage account). You won't have the same tax advantages that you have with the IRA, but it might be better than just a savings account.

Edit: Follow up: I think we are still going to slide down a bit from here...so I might buy slowly...If you can max out at $3,000, I might do $1,000 a month for the next three months. I personally have been buying a lot of retailers....I bought a bunch of J crew when it was at 41 (down from 52)...then I bought a bunch more at 33...and now its down to $28...probably will buy more at $25...(and wait for the Christmas boom to bump it back up)...Retailers are going to have a hard time right now. If I were you...and I might be a little riskier than you...I would put a lot of my savings into an online brokerage account...again, e-trade, ameritrade, bank of america...and get it all invested over the next few months while everything tanks. I am however advising you to do something that can lead to some hefty taxes if you do make some decent money though. I am a LONG term investor. I don't own anything that I plan to sell within a year...most are longer. Buy low...sell high...and keep them long term.

Answer 2

To answer your last question first, you could talk to a financial planner, or spend some time learing about investing yourself. There are hundreds of web sites, Motley Fool, for one, that have good information. As for pulling out of the stock market when it is down, bad idea. The market has price swings, and the time to buy is when it is down and the time to sell is when it is up, not the otherway around. Patience is a virtue here. Your major, significant and eventually profitible company choices should be far ahead of where they are now in a few years time. There are several , FDIC insured, savings/money market internet banks that pay significantly more than your current one percent. Start with bankrate.com to compare.

And just one final comment, Wachovia is on the watch list by some for problems. As long as your total investments with them - $100,000 cd/savings or $250,000 IRA is not exceeded by the federal insurance limit (FDIC), you will not loose any money should they close.