Roth IRAs funding and conversions Big fan of Roth conversions. Did 3 - all post retirement, Couple nice features: No RMDs + when you need a large amount all at once for a major purchase the $$ is easily accessible w/o having to worry about the tax hit.
As sma3 alludes, the best investments after the Roth is established would appear to be the growthier ones - particularly if you have a very long time horizon. Not a done-deal however. If you felt markets were high in terms of valuations, you might want to keep more conservative investments in the Roth for a while. A dollar’s loss in a Roth actually hurts more than loosing a $ in a taxable Traditional IRA. Another way to look at it: If you gamble with a highly speculative investment inside a Traditional IRA, Uncle Sam is party to any loss. But if you gamble inside a Roth and lose money, it’s 100% your own money.
No rigid rule here. But have tried over many years to position my best and most stable funds inside the Roth (those with low fees, long proven track records, highly reputable firms). Newer funds, smaller balances, and the assets I trade in and out of more have ended up in the Traditional. Also - hardly ever keep cash in the Roth.
Roth IRAs funding and conversions I believe that the final result depends on many factors, such as your tax rate now compared to the tax rate many years later. Yet another consideration is whether you plan to use all of your funds, or pass them to your children upon your death.
Roth IRAs funding and conversions My wife and I have been converting some of our IRAs into Roths, now we are retired and in lower income brackets, until we have to take RMDs in 3 and 7 years respectively.
This now adds a third type of account besides general taxable vs non-taxable, ie one that while non-taxable will hopefully be available to our heirs.
Any thoughts re
1) best type of assets to put into a Roth?
The typical recommendation for a taxable account is non- dividend paying equity funds and growth stocks as capital gains rates are lower than income tax rates. Qualified dividends also get taxed at capital gains rates.
Whereas investments that throw off cash taxed at income tax rates should be in IRSs etc, as all of the withdrawals will be taxed at those rates, regardless.
Bonds even high yield Bonds while tax free in a Roth, would not seem to have the same prospective rates of returns over decades as Equities. I also want to avoid speculative ideas, as significant capital losses eliminates the advantage that taxes have already been paid on the money.
2) Has anyone found useful calculators or spreadsheets to help determine the tax implications of Roth conversions? Surprisingly, I cannot find anything helpful, other than calculations for the RMD itself.
Matthews Asia Total Return Bond and Asia Credit Opportunities Funds to be liquidated Thanks
@Crash &
@carew388Neither MAINX (+3% 1 year) or MICPX (
-1.65%
-1 year) appears to have a terrible one year stretch. Most everything related to EM got clocked last year. Not familiar with Matthews funds - but recall some favorable mentions here over the
years. Possibly “fickle” investors fleeing, or maybe (more likely) just the trend out of mutual funds and into ETFs.
Pimco reorganizes several funds Pimco (especially Pimco Income) didn't do that well during the GFC, but they knocked it out of the park during the recovery. If someone wants to compare the performance between the successes of 2009 ff. and this period, the next two years are where the apples-to-apples comparison will be.
P.S. They have so many funds, sliced and diced into so many strategies, it sure wouldn't hurt to thin the herd a bit.
The Last Ten Days Have Been the Hottest in a While (2023 Market Observations) I've done some rearranging in the IRA. In taxable, I continue to d-c-a. I will grow the bonds in days to come. Success with my current stable of single stocks has been respectable since I started that account in the Spring of 2022. Apart from the dreadful LOSS connected to 2 particular stocks I dumped when the pain got to be too much. At this moment, I've clawed my way just above even-steven. My RE investment is a thing I don't expect much from until ....... I dunno. Focus these days is on HYDB and SCHP. Letting my winners run, without adding. Deliberately spread into various market sectors.
@Crash, congrats, your TUHYX has been tearing it up YTD and over the past three months. I have never liked that fund among its peers. But never said anything because when you start telling others you think they have an inferior fund it usually blows up in your face. Sometimes best to keep one’s opinion to yourself lest you look like a fool as I would have looked had I told you to sell TUHYX and look elsewhere in junk.
After a down year junk bonds are notorious for big snap back
years. So let’s hope the junk rally has legs. January is historically the best month for junk and one of the surest seasonality trades out there,
Matthews Asia management changes to two funds M* had mentioned that co-lead-manager Yu Zhang was responsible for the recent (5+ years) shift in MAPIX from old current-dividend emphasis to also include dividend-growth emphasis. As a result, MAPIX started behaving similar to other growth-oriented Matthews Asia funds. IMO, this change may restore MAPIX to its original current-dividend emphasis.
Good catch, Yogi; didn't realize the strategy change with YZ, just that it seemed to get growthier than it was during its better days.
Off topic: I also hadn't realized until yesterday that the China Dividend fund is up more than 30% in the last 3 months (not up just in the current rip).
Grandeur Peak's CEO letter There are only a handful of small-cap funds less volatile than the S&P 500, and I don't know if there are any with a growth-stock orientation like these funds. One on the value side is RYSEX. Actually, NBGNX is one on the growth side. But that has a very different style and owns much larger stocks than these GP funds. It doesn't make them bad funds, but you have to know what you're buying before investing. Perhaps it would be a useful launch for GP, given the slew of fund launches they've had over the years, to create a new truly defensive small-cap fund.
A couple of things that make small cap funds more defensive in downturns are cash obviously, put options, holding dividend-paying stocks with a strong track record of paying them, strong balance sheets, low valuation but high quality companies with the aforementioned strong balance sheets. RYSEX for instance holds cash and seeks companies with low valuations and rock solid balance sheets. QRSVX on the value side is similar.
The Last Ten Days Have Been the Hottest in a While (2023 Market Observations) @Hank- maybe Junkster is thinking of ol' FD.
Actually no one person in particular, just a slew of them spread over numerous forums over many
years.
Rare earth minerals: BIG find. Sweden.
The Last Ten Days Have Been the Hottest in a While (2023 Market Observations) Are the data for year 2020-2022 available? After 2022, it would be nice to have a decent year.
Nothing to update as 2020-2022 were not trifecta
years. We won’t know if 2023 is such till the end of January.
Exxon Mobil accurately predicted warming since 1970s, study finds https://nbcnews.com/science/environment/exxon-mobil-accurately-predicted-warming-1970s-study-finds-rcna65583Will it affect its stock? It should, but it probably won't unless there's some sort of class action suit or government prosecution. An article excerpt:
Exxon Mobil’s scientists were remarkably accurate in their predictions about global warming, even as the company made public statements that contradicted its own scientists’ conclusions, a new study says.
The study in the journal Science Thursday looked at research that Exxon funded that didn’t just confirm what climate scientists were saying, but used more than a dozen different computer models that forecast the coming warming with precision equal to or better than government and academic scientists.
This was during the same time that the oil giant publicly doubted that warming was real and dismissed climate models’ accuracy. Exxon said its understanding of climate change evolved over the years and that critics are misunderstanding its earlier research.
Scientists, governments, activists and news sites, including Inside Climate News and the Los Angeles Times, several years ago reported that “Exxon knew” about the science of climate change since about 1977 all while publicly casting doubt. What the new study does is detail how accurate Exxon funded research was. From 63% to 83% of those projections fit strict standards for accuracy and generally predicted correctly that the globe would warm about .36 degrees (.2 degrees Celsius) a decade.
The Exxon-funded science was “actually astonishing” in its precision and accuracy, said study co-author Naomi Oreskes, a Harvard science history professor. But she added so was the “hypocrisy because so much of the Exxon Mobil disinformation for so many years ... was the claim that climate models weren’t reliable.”
Study lead author Geoffrey Supran, who started the work at Harvard and now is a environmental science professor at the University of Miami, said this is different than what was previously found in documents about the oil company.
“We’ve dug into not just to the language, the rhetoric in these documents, but also the data. And I’d say in that sense, our analysis really seals the deal on ‘Exxon knew’,” Supran said. It “gives us airtight evidence that Exxon Mobil accurately predicted global warming years before, then turned around and attacked the science underlying it.”
Rebalancing your portfolio We’ve (DW & I) been at the conservative end with a target equity of 35% and 22% to TIAA’s Traditional account “guaranteeing” 3+%/yr. I’m grateful to have only taken a 7% hit this past year, between the 28% bond funds and 10% cash. Instead of investing the RMDs these last few years and not needing half of them for living expenses, we’d stashed the cash in 2020-21.
Now that the market has dropped, we’ve been investing back into equities (VTI, VIG, SCHD, VPU). We’d started to purchase short-term treasuries (3 and 6-month) at auction, but our VG money market funds seem just as competitive at the moment (am I missing something here?).
Buy Sell Why: ad infinitum. @catch22 - Do you have a chart showing the relative performance for the
next 7
years? My guess is that those lines will pretty much converge again before this episode is all finished, as they did in 2018 and 2020. More aggressive funds tend to lead both on the way up and on the way down.
TRP Global Technology PRGTX Upcoming Manager Change IIRC, back when I held it, Josh Spencer ran the fund fairly aggressively, too ... but he managed it quite well. I always liked PRGTX but think it got a bit reckless and IMO became addicted to Hopium(tm) in recent years (like Cathie Wood), so perhaps the manager change is deserved.
A 55% loss is inexcusable, in my view. Growth was rapidly falling out of favor as rates rose, yet I guess Tu stuck to his plan and rode it all the way down instead of trimming or moving more into safer holdings and/or cash. Reminds me of DODFX sticking to financial stocks during the GFC because it was "the plan" ... or Arnott holding a 20% short S&P position in his fund during years of a bull market because it was "his model."
When the situation changes, what would you do?
