IRA INFO: What to do and what not to do

Most people tend to procrastinate when it comes to investing and an IRA. One reason why is there are so many choices when it comes to picking the right IRA for your needs. There are three type of IRAS to look at when making your decision--the Roth, the deductible IRA, and the nondeductible IRA--all of which have totally different options and eligibility requirement depending on your needs.

With so many options to choose from many people just choose to not do anything at all.

Here are some dos and dont's to keep in mind when choosing the right IRA for you.

DO:

Think of picking an IRA as a way to take control of your financial portfolio against an unpredictable market. You cannot control the market's ups and downs, but you certainly can make sure that your investments are as good as they can be, keeping your investment costs low, and also make sure you take advantage of every tax-sheltered opportunity available to you, such as contributing regularly to your IRA.

Consider tax-managed funds. If the IRA Calculator tells you that you're eligible to contribute only to a traditional nondeductible IRA, yet another option to consider is a tax-managed fund. Planners often steer those who earn too much to contribute to a Roth to a nondeductible IRA, but you'll have to start taking withdrawals at age 70 1/2 from the IRA. A tax-managed fund, by contrast, offers no such strictures but offers the same tax-deferred compounding.

Dont's:

Forget about your spouse. When your married you and your spouse both can setup IRAs
helping you invest even more for the futre. A so-called spousal IRA is an option as long as you file a joint return and the working spouse is earning enough to cover the earnings qualifications to fund both his and her IRA contributions.

Assume you need a lot of cash on hand to invest in an IRA. Your 2008 Contributions can be spread throughout the year to help make it more affordable. Such a strategy, called dollar-cost averaging, which helps ensure that you're not putting money to work when the market's peaking. This option also makes an IRA a more affordable option for those who don't have the full contribution amount on hand. Your Broker can help you set this up to where you can average it out, you can afford to invest more smartly.

Mutual Fund Info

Mutual funds are becoming more and more popular as a long term investment. They are a great long term investment because it is a lower risk investment than can gradually grow but will not hurt you much, but on the other hand they will probably not make you rich either. Here are a few top companies that rate mutual funds to help you pick the best one available for you.

Morning Star:

Morning Star has been rating mutual funds for over 20 years now. They give ratings based on a point system that gives ratings from 1 to 5 stars. It looks at the companies initial risk at the time and then goes from there. The only problem with there system is that it bases it mostly on current risk and does not plan much for the future..


Business Week

Business week has Mutual Fund Scoreboard that is carried annually in their magazine, but savvy investors can access that scoreboard at any time by going to Business Week's website and accessing the Mutual Fund Scoreboard. The keep the Mutual Fund score board updated on a month to month basis. They rate funds in a few different, but they obtain the overall rating by checking out the funds performance over a five year period, based on risk adjusted returns. They deliver the ratings in a letter grade with A being the best fund rating and F being of course the lowest fund rating.

Selling My Company Stock Part II

Well a few weeks ago I wrote an article about selling some my company held Stock in Walgreens. I am now looking pretty good as it has dropped a few dollars a share for some reason. At the time I was not really worried about it dropping and I still do not want it to drop to much even though I did save a few hundred dollars by selling high, but I did not sell all my shares. I plan to keep the rest in there as a long term investment, and also keep adding to it by getting 2% taking out of my check on a stock purchase plan. I believe this stock over time will really make me some money, but in my current situation I figured adding to my down payment on my house would be worth much more as it is a good investment aswell.

Watching Your Company Stocks

I noticed my company stock shot up a few dollars yesterday with reporting of good quarterly earnings, so I decided at this point in my life I needed to sell a few shares. I decided that I would sell 75 shares which was over half of what I had in order to get some much needed capital to put a down payment on a new home which I also consider a bigtime investment. So if you were in my situation would you also move around some of your money just to get the house of your dreams? I decided that making my payment that much lower and selling while my stock was up was the best decision I could have made at the time. If you have thoughts on this let me know what you think?

New Age of Online Banking

Banking around the clock is no longer a remote possibility. But the banks don't have to keep their branches open 24 hours a day to provide this service. This is one of the biggest advantages of Internet banking.

One doesn't have to go to the bank's branch to request a financial statement. You can download it from your online bank account, which shows you up-to-the-minute updated figures.

Another advantage of Internet banking is that it is cost-effective. Thousands of customers can be dealt with at once. There is no need to have too many clerks and cashiers. The administrative work gets reduced drastically with Internet banking. Expenditures on paper slips, forms and even bank stationery have gone down, which helps raise the profit margin of the bank by a surprisingly large number.

As far as customers are concerned, their account information is available round the clock, regardless of their location. They can reschedule their future payments from their bank account while sitting thousands of miles away. They can electronically transfer money from their bank accounts or receive money in their bank accounts within seconds.

You can apply for a loan without visiting the local bank branch and get one easily. You can buy or sell stocks and other securities by using your bank accounts. Even new accounts can be opened; old accounts can be closed without doing tedious paperwork. Especially with the increasing acceptability of digital signatures around the world, Internet banking has made life much easier and banking much faster and more pleasant, for customers as well as bankers.

Rates Increase

Well yesterday I posted it may be a great time to buy a house with the fed cutting rates. Well this cut was more based on short term loans in order to for corporations to take out more short term loans and hire more people which will help the overall economy. This cut the fed made had a negative affect on long term loans such as mortgages and with inflation these rates will now be over 6% instead of staying in the 5.5% range like they should be.

So be cautious as you are looking around and make sure you find the loan that is right for you..

Right Time to Buy a house!

It may not be a great time to sell a house because of the crashing real estate market, but if you are sitting in a position where you do not own a home and are looking to make the move into a house, then you should be very happy at this point.

First the interest rates on home loans have been dropping recently which could put the house of your dreams within a little closer reach then it may have been just a few weeks ago. If you were looking at a house that might have been to much monthly well if you can lock in a rate under 6% over 30 years then you might just be able to afford a little bit more to put you at your comfort level on your monthly payment.

Good Luck in the House Hunting, I know I am keeping my eyes out for that next great deal aswell..