Investing General Discussion

Denamian · Dec 25, 2019

Fogel said:
Not sure what you consider pocket change, but IRA's have a yearly contribution limit of 5,500 a year, so once you put that much in it for the year you're done. If you have more money you want to invest at that point, you need to put it in a regular account, the only difference being is this account is subject to taxes. Once you have money in either account, you need to pick an actual "fund" to put it in. Many sites like Vanguard and Fidelity, which most of us use because they're easy to use and have crazy low fees, have target retirement funds that will automatically allocate between bonds/stocks based on your retirement year. Or you could just pick a regular index fund like S&P500, Dow Jones, etc.

I'll probably have $1k at most to start out with and while I'll be adding as much as I can, the likelihood of hitting the max yearly contribution for a Roth is pretty much nil.

TJT · Dec 26, 2019

You also lose the primary income tax benefit of Roth if you make over some amount. I think it's 75k.

fris · Dec 26, 2019

Pretty sure the Roth cap is $150k solo, $200k married

Khane · Dec 26, 2019

Never heard of doing a backdoor Roth IRA so decided to look into it.

Income limits for Roth IRA:

Roth IRA Income Limit
The income limit for contributing the maximum to a Roth IRA will go up by $2,000 for singles from $122,000 in 2019 to $124,000 in 2020. It will go up by $3,000 for married filing jointly from $193,000 in 2019 to $196,000 in 2020. You can’t contribute anything directly to a Roth IRA when your income goes above $137,000 in 2019 and $139,000 in 2020 for singles and $203,000 in 2019 and $206,000 in 2020 for married filing jointly, up by $2,000 and $3,000 respectively in 2020. You can still do a backdoor Roth IRA in such case.

Backdoor explanation:

Backdoor Roth: A Complete How-To

A step-by-step tutorial for how to do a backdoor Roth IRA, including links to articles on how to report it on the tax return.

thefinancebuff.com

Blazin · Dec 26, 2019

They have become increasingly popular, there has been mutterings of IRS closing the loophole but like all the other ones they probably won't ever get around to doing it.

Cad · Dec 26, 2019

The IRS could close that loophole at any time prior to us withdrawing it though and it’d make it worthless. It’s also only like $5k/yr so it’s not life changing either way.

Khane · Dec 26, 2019

Yea it's a lot of work for relatively little gain

Gravel · Dec 26, 2019

You all remember a few months ago when every media outlet was saying a market drop was imminent? They're up almost 14% since then.

Up almost 40% since December 2018's drop. I pity people who market time and/or listen to pundits.

fris · Dec 26, 2019

So 2020, keep putting $ in my fidelity roth ira or open a new one in vanguard?

Sanrith Descartes · Dec 26, 2019

Gravel said:
You all remember a few months ago when every media outlet was saying a market drop was imminent? They're up almost 14% since then.

Up almost 40% since December 2018's drop. I pity people who market time and/or listen to pundits.

The Fed has been pumping insane amounts of liquidity into the market via its "not really QE, but really QE) bond buying. Getting out if equities based solely on market fundamentals is the correct call. What no one can factor in is the manipulation by the central banks. Just remember the golden rule when you ride the wave up. You better be one of the first ones out the door because there are going to be lots of bagholders when the wave crashes.

Gravel · Dec 27, 2019

Except that even if we now have a 20%+ drop, we'd be higher than we were. So that logic is shit.

Have fun with your sub-performing assets, market timer.

Fogel · Dec 27, 2019

I'd be worried about 2019's gains if it existed in a bubble, but remember that 2018 was very flat over all and then all of a sudden the crazy gains don't seem so crazy.

Blazin · Dec 27, 2019

Sanrith Descartes said:
The Fed has been pumping insane amounts of liquidity into the market via its "not really QE, but really QE) bond buying. Getting out if equities based solely on market fundamentals is the correct call. What no one can factor in is the manipulation by the central banks. Just remember the golden rule when you ride the wave up. You better be one of the first ones out the door because there are going to be lots of bagholders when the wave crashes.

yeah definitely don't want to participate in a secular bull market, :/

Sanrith Descartes · Dec 27, 2019

Blazin said:
yeah definitely don't want to participate in a secular bull market, :/

If you are suggesting that buying in now is a good idea, then we have a difference of opinion.

Aychamo BanBan · Dec 27, 2019

Khane said:
Yea it's a lot of work for relatively little gain

It literally takes like five minutes of work. You open an IRA and then transfer the money in. Come back like 2-3 days later then convert to the Roth IRA. Now you have money that will grow tax free. You can hold assets in there that would normally be very tax inefficient, such as bond funds, total stock market index funds, etc, allowing you to grow more wealth. Or you can move it from there to a self directed IRA and then get involved in whatever other types of investing you want, and save on taxes the whole time.

Sanrith Descartes · Dec 27, 2019

Gravel said:
Except that even if we now have a 20%+ drop, we'd be higher than we were. So that logic is shit.

Have fun with your sub-performing assets, market timer.

I'm sure ignoring market fundamentals and the Fed's actions will pay off for you in the long term.

Blazin · Dec 27, 2019

Sanrith Descartes said:
If you are suggesting that buying in now is a good idea, then we have a difference of opinion.

Can you explain your plan for if you’re wrong? Say blazin is right and we are in a strong secular trend and it runs another decade plus without the bear marker you fear? What then?

Gravel · Dec 27, 2019

Sanrith Descartes said:
I'm sure ignoring market fundamentals and the Fed's actions will pay off for you in the long term.

"Market fundamentals"

Please.

See my post on the last page about how CAPE has been a complete failure of a concept for almost 2 decades ago now.

Blazin · Dec 27, 2019

Sanrith Descartes said:
I'm sure ignoring market fundamentals and the Fed's actions will pay off for you in the long term.

Are you freaking kidding me? You could have said that same thing in 2011, 2013, 2016, and on on . Let me guess it's also propped up by backbacks! Step away from zero hedge man and start actually educating yourself.

Blazin · Dec 27, 2019

I'd bury you under a mountain of the weight of the evidence but what is the point you go on thinking you are the only one aware of market dynamics. Nobody needs to predict a fucking thing, You observe and weigh the data with an open mind and respond the price action that is real and in front of you. I'm no perma bull either, DON"T FIGHT THE TREND, it's the simplest and hardest lesson for people to learn and most don't. You see that you have been wrong for how long now and yet you will still beat the same drum instead of trying to figure out how you could have been so blinded.

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