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Gifted IRA in TVFQX - what to do?
My parents began saving for my retirement while I was still in high school (pretty cool, I know). Anyways, now I'm of age that this investment is becoming my responsibility (further contributions, and deciding where to put this money).
Currently there's somewhere between $15k and $25k (don't have the exact numbers in front of me), all invested a in TVFQX, a technology heavy mutual fund by firsthand funds (www.firsthandfunds.com). Unfortunately a decent chunk of this was purchased at it's height during the tech boom, but enough was purchased right after the bubble burst when it was really cheap so that I believe the investment as a whole is currently slightly positive vs. total money put in so far. I now have a choice about where to put my parent's final contribution (the max for 2005, $4k I think? something like that) and if I want to move the rest of the money. I do not feel qualified to pick stocks, and have been shown much evidence that in the long term, very few if anyone can. The information I've come across thus far says that for the average long term investor, a passive index-fund (with very low overhead such as one of the Vanguards) is the way to go. So basically I'm asking for advice for what to do with somewhere around $20k in an IRA that's currently all in TVFQX and what my plan should be for future years with regards to this investment. |
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Re: Gifted IRA in TVFQX - what to do?
First, here's a link to TVFQX Portfolio .
[ QUOTE ] I believe the investment as a whole is currently slightly positive vs. total money put in so far. [/ QUOTE ] You shouldn't consider this important. Your goal should be to manage the funds so they become the most in the future, not worry about the past! You do this by continuing to contribute to the IRA every year, and learning about how to properly allocate your asssets. [ QUOTE ] I now have a choice about where to put my parent's final contribution (the max for 2005, $4k I think? something like that) and if I want to move the rest of the money. I do not feel qualified to pick stocks, and have been shown much evidence that in the long term, very few if anyone can. The information I've come across thus far says that for the average long term investor, a passive index-fund (with very low overhead such as one of the Vanguards) is the way to go. [/ QUOTE ] The short answer is that you should put this years contribution into the fund that your parents have setup for you, and then start doing your own homework to increase your knowledge. It happens that the Firsthand Technology Value fund is not a bad choice. Like all tech funds that lived thru the internet/nasdaq boom/bust it was a wild ride, but this fund has outperformed the indexes with an avg annual return of 15.58% (as of 2/28) since its inception in 5/1994. [ QUOTE ] So basically I'm asking for advice for what to do with somewhere around $20k in an IRA that's currently all in TVFQX and what my plan should be for future years with regards to this investment. [/ QUOTE ] Your plan should be: 1. Keep adding the max contribution to your IRA. 2. Set aside additional funds for investment. (in a 401K and/or taxable account) 3. Increase your knowledge so that you can make good choices about appropriate allocations given your risk tolerance and overall financial plan. |
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