How to invest in an IRA
09/11/2011 0 comments
Other than putting your retirement money in a bank to earn low interests, you can open a brokerage IRA account and construct a diversified portfolio using ETFs or no load no transaction fee mutual funds.
Keep in mind that the two most important factors in portfolio management are risk management and diversification. Risk managment means only investing the portion of capital that you are comfortable with losing into risk assets such as stocks and commodities. Diversification means investing in a wide array of asset classes that represent broad economic segments such as US stocks, developed country stocks, emerging market stocks, Real Estate Investment Trusts (REITs), commodities and bonds.
For beginners or those who prefer simple and passive methods, you can consider strategic asset allocation which chooses a diversified array of ETFs or mutual funds and periodically re-balances the allocations (such as monthly, quarterly or annually).
For active investors or those who are more risk averse (those who can not withstand big loss), you can consider tactical asset allocation which dynamcially adjusts allocations among a diversified array of ETFs or mutual funds peridocially.
The page ETF or Mutual Fund Model Portfolios lists ETFs or brokerage specific no load no transaction fee mutual fund portfolios using asset allocation.
comments 0
Or Start FREE 30-day trial now >>
