| |
 |
|
|
Finance & Stock Groups Forum Index » Mutual Funds » IRA-investment thoughts
Page 1 of 1
|
| Author |
Message |
| Robert Ricks |
 Posted: Thu Jul 05, 2007 10:36 pm |
|
|
|
Guest
|
I am 53, my wife 46. We currently have our IRAs at Schwab--split between
LCEIX and CD-cash. I keep waiting for the "best" time to reallocate but
know there is no such time (just as long as we don't due it at the worst
time). The IRS as not large--apprx $25 K each.
I am considering moving mine into Schwab 2010 target fund SWBRX and hers
into Schwab 2020 target fund (SWCRX). We don't anticipate having to get
into either for at least 10 years or longer (but who can read the future).
Any thoughts on these investments? I would like to stay at Schwab as
otherwise there is a huge transfer fee. I am a moderate conservative in
investing -willing to take some chance but can't afford a large loss.
Thanks for your ideas, suggestions in advance. |
|
|
| Back to top |
|
| Ed |
| Posted: Thu Jul 05, 2007 11:14 pm |
|
|
|
Guest
|
LCEIX is a new fund and has is not rated. You're brave.
AIM is not one of the best fund families.
http://quicktake.morningstar.com/FundFamily/Snapshot.asp?Country=USA&Symbol=10123
This link will give you data on the family, not any specific fund.
The scores are low, click on the little question mark next to the word score
for more info.
I'm not a Schwab client so I can't help you with thier funds other than to
tell you that the Schwab 2010 fund is a fund of funds.
http://quicktake.morningstar.com/fundnet/Holdings.aspx?Country=USA&Symbol=SWBRX&fdtab=portfolio
You should look at the funds in the portfolio to get a better idea of the
fund.
Schwab stock funds appear to be above average.
http://quicktake.morningstar.com/FundFamily/Snapshot.asp?Country=USA&Symbol=10644
"Robert Ricks" <stevericks@mindspring.com> wrote in message
news:TSaji.4025$rR.465@newsread2.news.pas.earthlink.net...
Quote: I am 53, my wife 46. We currently have our IRAs at Schwab--split between
LCEIX and CD-cash. I keep waiting for the "best" time to reallocate but
know there is no such time (just as long as we don't due it at the worst
time). The IRS as not large--apprx $25 K each.
I am considering moving mine into Schwab 2010 target fund SWBRX and hers
into Schwab 2020 target fund (SWCRX). We don't anticipate having to get
into either for at least 10 years or longer (but who can read the future).
Any thoughts on these investments? I would like to stay at Schwab as
otherwise there is a huge transfer fee. I am a moderate conservative in
investing -willing to take some chance but can't afford a large loss.
Thanks for your ideas, suggestions in advance.
|
|
|
| Back to top |
|
| Anything Needed |
| Posted: Sat Jul 07, 2007 8:56 pm |
|
|
|
Guest
|
Mr. Ricks,
Ed already mentioned that LCEIX is a very new fund, inception date of
07/15/2005, and I think you may want to consider investing your money
in some funds that have significantly more history and consistent
performance. As a fund family in general, AIM is ok, but they're not
the best. Their fees are average and they've got an ok lineup of fund
choices, but you might do better with a different family.
Since I'm not an advisor w/Schwab, I'm not really familiar with their
own funds. What strikes me as potentially unacceptable is this
transfer fee you mentioned. You said you and your wife both have IRAs
with approx $25K each, making your total aggregate balance about
$50K. How much is the transfer fee, and how do they justify it? Let
me be clear on this one - you're getting charged all the normal mutual
fund fees and expenses, but are there other internal Schwab fees
(monthly maintenance fees, low balance fees, transaction fees, etc.)?
If so, I'd seriously suggest that you consider moving your accounts to
a broker who does not charge these fees.
One other thing I'm wondering about is why you've got CD's in your
accounts, and how much of your portfolio is in them. If you're not
planning on touching the money for over 10 years, CDs are way too
conservative, even when you're a Moderately Conservative investor.
So, the question is who chose your asset allocation? With $25K in
each account, you'd probably do well with between 3 to 4 funds, not
just one, and definitely not a brand new fund. I'm a big fan of
American Funds, and for a 50-55 year old Moderately Conservative
investor with $25K that's not needed for 10+ yrs, I'd probably suggest
something close to this: CWGIX 30%, ANCFX 15%, CAIBX 30%, AHITX 25%. |
|
|
| Back to top |
|
| Robert Ricks |
| Posted: Sat Jul 07, 2007 11:24 pm |
|
|
|
Guest
|
LCEIX was originally Invesco Industrial Income Fund (FIIIX). When we bought
it in 1990, it was 5 stars at Morningstar and highly rated in everyone's
newsletters. A top, safe mutual fund recommended by Money Mag and all the
big shots. My wife had changed jobs and we rolled her retirement
contributions into it---wanting a "safe" fund that should deliver some
growth. It then went through about several name changes--- AIM Core Stock
Fund, then AIM Diversified Dividend Fund. As we are not current rich from
it, I realize it is time to find another. Guess I am really interested in
what folks think of the Schwab Target funds.
Right now our IRA portfolio is about 50% LCEIX and 50% CDs. In the past I
have posted that right now, CD's seem to be the smart bet instead of
investment grade bonds (thoough I did get a few comments saying I should
have 4.5% noninsured bonds rather than 5.$% insured CDs--still can't
understand that reasoning). I'm getting +5.4% on CDs that carry FDIC
insurance, whereas, bonds are not insured and yields aren't much different.
There are also no brokerage fees with CDs. Yes, I know CD's are too
conservative-hence why I am looking at the target funds. Mainly wanting to
know if anyone has heard anything bad about them.
Best I remember the transfer out fee is $95 per account at Schwab. We also
have one other Schwab account. There may also be account closing
fees--haven't looked lately. Right now I don't pay any fees (at least
directly) or have any similar charges. I can also buy a good number of
mutual funds without incurring any fees (as long as one doesn't sell within
90 days). If I were starting from scratch, I would probably have a
different broker, but moving would cost me far more than staying at this
point. Schwab is ok -other than their fee structure is set up to keep you
from leaving. |
|
|
| Back to top |
|
| Ed |
| Posted: Sun Jul 08, 2007 12:28 pm |
|
|
|
Guest
|
"Robert Ricks" <stevericks@mindspring.com> wrote
Quote:
LCEIX was originally Invesco Industrial Income Fund (FIIIX).
That's interesting. I owned shares of that fund when it was called Financial
Industrial Income. It was a very good fund managed by John Kaweske. Kaweske
also managed their Health fund. He was fired by Invesco for front running
and besides paying a hefty fine to the SEC I believe he was barred from
managing money ever again. |
|
|
| Back to top |
|
| Mark Freeland |
| Posted: Sun Jul 08, 2007 6:22 pm |
|
|
|
Guest
|
"Robert Ricks" <stevericks@mindspring.com> wrote in message
news:lLRji.4558$rR.4301@newsread2.news.pas.earthlink.net...
Quote: Best I remember the transfer out fee is $95 per account at Schwab. We
also have one other Schwab account. There may also be account closing
fees--haven't looked lately.
Schwab has changed its fees (again) as of July 1.
http://www.schwab.com/cms/P-1036363.7/July07_Pricing_Guide_REG23060-10.pdf
The full transfer out fee is now $50. I don't see a separate closeout fee
for IRAs (these are not uncommon, I think because the broker has an
arrangement with a separate IRA custodian - you might check your IRA
documents).
One way of avoiding the transfer fee for IRAs is to liquidate your holdings.
(Since this is an IRA, selling and repurchasing in the new IRA has no tax
consequences.) The broker may waive the transfer out fee for cash;
alternatively you can take posession of the cash and do a 60 day rollover.
This comes with two warnings: 1) If the IRA has a closeout fee, you may
still be subject to that. For example, "Fidelity IRAs ... will be charged
a $50 liquidation fee at close-out."
http://personal.fidelity.com/accounts/pdf/FBS-BKCOMMSCHED-0105.pdf
2) You can only do a 60-day rollover once per year per IRA.
"You have two traditional IRAs, IRA-1 and IRA-2. You make a tax-free
rollover of a distribution from IRA-1 into a new traditional IRA (IRA-2).
You cannot, within 1 year of the distribution from IRA-1, make a tax-free
rollover of any distribution from either IRA-1 or IRA-3 into another
traditional IRA. However, the rollover ... does not prevent you from making
a tax-free rollover from IRA-2 into any other traditional IRA."
IRS Pub 590: http://www.irs.gov/publications/p590/ch01.html#d0e4197
Mark Freeland
BnetOnewsX@sbcglobal.net |
|
|
| Back to top |
|
| |
|
Page 1 of 1
All times are GMT
The time now is Wed Jan 07, 2009 8:52 am
|
|
|