Good or bad time for to open IRA?

[Troyrb]

With the bad news every day I'm just so scared to open a IRA now. Should I go through with it or just keep my money in the bank to see if things improve?

[Ima saver]

I think you should go ahead and open it now.

[disneysteve]

It is ALWAYS a good time to open an IRA.

What you are really asking is should you invest in stocks right now. That is more of a judgement call. The market is down a fair amount but many feel it hasn't hit bottom yet. I don't believe in market timing but I also don't believe in trying to catch a falling knife.

In my portfolio, I'm continuing to buy. But I'm not just starting out. I've been at this for 15 years. For someone just starting, it might not be such a bad idea to lean conservative at the moment and watch market conditions closely. Open that IRA and consider putting the money in bonds and cash instruments. Our bond fund (Vanguard Total Bond Index) is up 7.41% YTD. I'm sure a lot of stock investors would be thrilled with a 7.41% gain right about now.

So go ahead and open that account. There is still time to make a 2007 contribution. Then you can start on your 2008 contribution.

[Broken Arrow]

For long term, passive investing, market conditions matter very little.

But if you must time the market, now is actually a great time to jump in! I know I am!

[Merch]

the tomorrow is always a bad time to save for retirement. today is always a good day to save for retirement.

oh and the market goes in cycles.

[jIM_Ohio]

always a good time to open an IRA.

[Troyrb]

Well I decided to go for it and opened a VanGuard SEP-IRA, I think I will say in a money market fund till I feel more comfortable with the market.

[disneysteve]

Well I decided to go for it and opened a VanGuard SEP-IRA, I think I will say in a money market fund till I feel more comfortable with the market.

Their best money market fund is Vanguard Prime. That's the one I'd suggest choosing. You may also want to consider a bond fund. They have several good ones to choose from.

[humandraydel]

Well, I bought stocks yesterday with half of my 2008 Roth contribution. As of today, I'm up 4.5% with that money! The market could go lower, but this is the 3rd time it has bounced off of lows, so I went for it. If it goes lower, I'll make the other half of my 08 contribution.

[kv968]

Our bond fund (Vanguard Total Bond Index) is up 7.41% YTD. I'm sure a lot of stock investors would be thrilled with a 7.41% gain right about now.

Steve, I think that may be the trailing year return, not YTD. Although I agree, right now bonds aren't that bad of a place to be if you'd like to wait to invest.

[Taribor]

If your style permits, check out a self-directed IRA. Leave most of your lump sum in a money market account/conservative fund within the IRA, and take a small portion and pick out a stock you like, and watch the yo-yo ride. That will give you a better idea of your tolerance level. It is easy to say "buy low sell high" but very, very different what you buy high, watch your stock get punched in the mouth, and panic sets in till you sell at a loss.

If it is too crazy for you, leave your money in the MM account where it is at least getting some tax-free (assuming it's a roth) earnings. If it doesn't bother you, then stick it in a fund/stocks; or, do a little of both, which is what I am currently doing.

[mikelley]

If my business gets much worse, I won't have to lie on my next tax return.

[project15]

Well, I bought stocks yesterday with half of my 2008 Roth contribution. As of today, I'm up 4.5% with that money! The market could go lower, but this is the 3rd time it has bounced off of lows, so I went for it. If it goes lower, I'll make the other half of my 08 contribution.

and then the next day, you lost that gain It was an exciting ride up due to the Fed's announcement on March 17.

[disneysteve]

Steve, I think that may be the trailing year return, not YTD. Although I agree, right now bonds aren't that bad of a place to be if you'd like to wait to invest.

OOPS! My mistake. That is the 1-year return, not the YTD return. YTD is 2.13% which isn't bad either considering what the market has been doing. In comparison, Vanguard Prime Money Market YTD is 0.87%.

[Troyrb]

Since I'm need to reduce my tax bracket with putting some money in the SEP IRA Vanguard Prime Money Market still work as a tax deferred investment? Or do I have to have it in a fund to be tax deferred?