Wednesday, November 30, 2005

Selecting Funds for the Rollover IRA

Ever since I saw this particular episode of Jim Kramer's "Mad Money", a few months ago on the potential rise in the healthcare sector due to the healthcare needs of aging babyboomers, I've been thinking about getting a healthcare sector fund. I'm not a fan of "Mad Money" but I agree with his reasoning on this topic. Frankly, he scares me quite abit with his squeals (his voice).
One fund that I was thinking about buying was Fidelity Select Medical Delivery (FSHCX). I should have done so earlier this year, of course, when the value was abit lower. I think I'll wait a wee bit for a small drop.
I already have primarily allocated retirement contributions to Large Growth and Value Funds as well as a Bond Fund and Foreign Funds. Also, some into the Midcaps as well. So, maybe, the rollover IRA money can be allocated to a fun and exciting (and scary, perhaps) focus fund or sector specific fund. Compared to other specific sectors, the healthcare sector seems to be abit less scary for the next few years.
But, I really have no experience in assessing funds and their potential, except for having read a couple of books on such topics. I've read that it's not advised that one buys a fund toward the end of the year due to fund distributions that are usually issued at the end of the year. But I am in not in a high income bracket to worry about a high tax bill, so I think it should be allright for me to buy at this time. I just don't want to leave the money in the rollover ira to stagnate for a couple of months or so.

4 comments:

  1. Hi Poe!

    I am also struggling with when to reallocate and purchase some new funds in my retirement account. I am thinking of waiting until Mid-January to get over the "Merry Christmas" bump in share prices. Trying to time the market is never a good thing, however waiting a few weeks with money that will be invested and working for 30+ years does not seem like such a bad thing. At least that is my probably flawed logic.

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  2. If I might share a few thoughts.

    First, as your retirement is quite a few years off, a couple of months of your rollover money 'doing nothing' won't matter at all in the long run. Much better that it spend a month or two maintaining its value (another perspective on 'stagnating') than make an overly hasty decision that you might regret.

    As far as 'waiting for the dip' and such, you might want to have a look at my thoughts on dollar cost averaging:

    http://rationalfinance.blogspot.com/2005/11/dollar-cost-averaging-vs-interval.html

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  3. Very true. I am going to wait until this holiday bump in share prices as well, then. Also, you're right..A couple of months waiting is nothing when you think of it in the long run too.

    Thanks for giving me perspectives on things...exactly what I needed!!

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