Help determining the right mutual funds and risk for my situation?
I am planning to begin investing in mutual funds. Most likely I will open a Roth IRA and invest to the max annually. Then just invest in funds themselves. I’m 42 years old and am generally conservative. I can handle some market fluctuation but I do not want to lose my savings being too aggressive. I’ve chosen to start with the Roth for retirment but with the flexibility to take out money invested in an emergency. What tools do you suggest to narrow down the options?
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admin @ May 15, 2010
unless you invest at least 60% in stock mutual funds, you won;t make enough to get you thru retirement
do you have a 401k plan at work? if yes, you’re probably better of there – especially if they have company match (FREE MONEY)
depending on the minimum amounts they let you invest in any single mutual fund in an IRA, I would recommend 40% in good bond fund – I use Pimco Total Return – good long term return and then the other 60% in 2-3 different stock funds – like one small cap stocks, one large cap stocks and one oddball/specialty fund (that may change in preference from time to time – there are magazines out every few months that rate the various mutual funds as well as lots of websites
I like the fund picks from Fidelity as a tool to find mutual funds.
There are funds called balanced funds. In my book they are ok. My pick in this area is the James golden balanced rainbow fund. Given your risk tolerance they may be right for you. The other option for you is to develop an asset allocation, where you have a percentage in bonds and stock mutual funds.