Who out there wants to maximize their IRA investment? Me too. That's why I wanted to share this article from Yahoo on how to get the best return on your IRA. Here are the key parts of the piece:
The key to getting the biggest bang for your buck is asset allocation. The right mix of stocks, funds, bonds, cash and other investments should balance risk and return in a portfolio.
Part of the secret of saving for your own retirement is getting into the habit of regularly looking after your own financial interests.
You should review the progress of your mutual funds every quarter. "Make sure the manager is managing the fund as you expected. If it diverges from your original goal, find out why the manager has invested in different stocks. One clue to the fact it's changed is comparing the performance of a mutual fund to an index that covers the category you think best represents what that fund should be doing, such as a small-cap index."
Like anything else, it helps if you have a plan.
My thoughts:
1. Yes, asset allocation is very important. I wrote about that recently -- see 4 Rules for Asset Allocation for details.
2. I've said a lot about managing your investments, index funds, and the like in the past. To see some great posts on these subjects, see my listing of top investing posts for 2005.
3. I'm in the process of rebalancing my portfolio. I haven't done it in a couple years (shame on me) and it's a mess!
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Thanks for this post! I've decided that i'm going to go ahead and start a Roth IRA. I've got a lot more research to do, but at 22 the time to start saving is now.
Posted by: Will Kirby | January 25, 2006 at 10:02 PM