http://www.latimes.com/business/la-fi-cover3-2008aug03,0,268891.story
Quote of the Day
"There's no way in hell the house you buy now will be more expensive next year," said Los Angeles economist Christopher Thornberg
Sunday, August 3, 2008
Friday, July 11, 2008
FDIC Seizes IndyMac
http://www.nytimes.com/2008/07/12/business/12indymac.html?_r=1&ref=business&oref=slogin
Wow..., even though many were expecting this.
Wow..., even though many were expecting this.
Wednesday, June 25, 2008
Investing in Roth IRA this year?
So I received a question today regarding contributing money to a Roth IRA this year even though the account lost money since last year.
The short answer is Yes!, if you have the money to spare to save for retirement. Although the contributions to the Roth IRA are already taxed from your income, all further capital gains, dividends, and interest are not taxed. In addition, any contributions can be withdrawn from the account at any time without additional tax or penalty, unlike a 401k loan.
For example if 5 years later, you need additional money for a down-payment on a house, you can withdraw the contributions made in the past 5 years (Up to $25k assume the contribution limits don't change). A 401k is not as flexible as you would need to take a loan from the account and repay the loan over a predetermined period. If you needed to leave or change jobs, the loan would have to be immediately or you would pay a penalty and tax on the withdrawn funds.
So why continue investing even though the account lost money in the last year?
Well as with investing in mutual funds in a standard brokerage account, the Roth IRA account is subject to the same market conditions. Investing in stocks/mutual funds requires a long term outlook due to the volatility of the markets. However over a long period a time, investing in stocks has provided a better return than many other investments. (Of course, past performance doesn't necessarily mean that future performance will be the same.) But investing early and diversifying investments will help in your long term financial health.
The short answer is Yes!, if you have the money to spare to save for retirement. Although the contributions to the Roth IRA are already taxed from your income, all further capital gains, dividends, and interest are not taxed. In addition, any contributions can be withdrawn from the account at any time without additional tax or penalty, unlike a 401k loan.
For example if 5 years later, you need additional money for a down-payment on a house, you can withdraw the contributions made in the past 5 years (Up to $25k assume the contribution limits don't change). A 401k is not as flexible as you would need to take a loan from the account and repay the loan over a predetermined period. If you needed to leave or change jobs, the loan would have to be immediately or you would pay a penalty and tax on the withdrawn funds.
So why continue investing even though the account lost money in the last year?
Well as with investing in mutual funds in a standard brokerage account, the Roth IRA account is subject to the same market conditions. Investing in stocks/mutual funds requires a long term outlook due to the volatility of the markets. However over a long period a time, investing in stocks has provided a better return than many other investments. (Of course, past performance doesn't necessarily mean that future performance will be the same.) But investing early and diversifying investments will help in your long term financial health.
Monday, June 9, 2008
Actively Mangaged Funds Fail to Beat Indexes
Interesting article from the WSJ comparing the performance of Indexes to actively managed funds.
The conclusion... most funds fail to beat the index.
"Vanguard Total Stock Market Index was ahead of about 60% of funds through April"
Full article found here:
http://online.wsj.com/article/SB121219547158334551.html
The conclusion... most funds fail to beat the index.
"Vanguard Total Stock Market Index was ahead of about 60% of funds through April"
Full article found here:
http://online.wsj.com/article/SB121219547158334551.html
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