You're not retiring for 30 more years. You'll want to own a diversified spread of stocks (so you don't end up dependent on one or two companies doing well) but you need to be thinking long-term. The only way mutual funds are a bad investment on the 30-year time horizon is if civilization collapses enough that bonds won't help you either.
Don't think of the short term when investing for retirement. It'd be a mistake to react to short-term movements (and really, even the recession we're trying to recover from now is "short-term" on your investment timeline) because you'll need to hold your investments for much longer periods regardless, and your investments will have decades to recover from any short-term drops.
If you want more details on why this is a good investment strategy for IRAs let me know and I'll get you some citations and more thorough explanations when I can. I'm busy with moving so I can't respond with links and stuff right now.
First of all thanks for replying, especially when you're busy moving!
I have heard that before, that at this point in my life micromanaging my IRA isn't productive. The problem is, I've already been through a crash: soon after I set up my IRA its value got halved. And right now I'm not reacting to short-term fluctuations; I think another crash is coming. Even if it doesn't, it's not like the economy's going to spring back to life in the next year, so for the time being I want to move at least half of my IRA to something stable, something safe. If the economy does crash again I don't lose nearly as much, and if it doesn't it's not like I'll miss out on massive gains, so to me it seems like the best choice right now. If it ends up doubling my money down the road then it's worth it
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I'm not sure how that matters; I don't want my IRA to get hosed again, and I think the risk in the stock market right now is far greater than any likelihood of real gains.
You're not retiring for 30 more years. You'll want to own a diversified spread of stocks (so you don't end up dependent on one or two companies doing well) but you need to be thinking long-term. The only way mutual funds are a bad investment on the 30-year time horizon is if civilization collapses enough that bonds won't help you either.
Don't think of the short term when investing for retirement. It'd be a mistake to react to short-term movements (and really, even the recession we're trying to recover from now is "short-term" on your investment timeline) because you'll need to hold your investments for much longer periods regardless, and your investments will have decades to recover from any short-term drops.
If you want more details on why this is a good investment strategy for IRAs let me know and I'll get you some citations and more thorough explanations when I can. I'm busy with moving so I can't respond with links and stuff right now.
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I have heard that before, that at this point in my life micromanaging my IRA isn't productive. The problem is, I've already been through a crash: soon after I set up my IRA its value got halved. And right now I'm not reacting to short-term fluctuations; I think another crash is coming. Even if it doesn't, it's not like the economy's going to spring back to life in the next year, so for the time being I want to move at least half of my IRA to something stable, something safe. If the economy does crash again I don't lose nearly as much, and if it doesn't it's not like I'll miss out on massive gains, so to me it seems like the best choice right now. If it ends up doubling my money down the road then it's worth it ( ... )
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