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15 years of my life wasted from bad IRA investments
Old 04-15-2010, 09:46 AM   #1
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15 years of my life wasted from bad IRA investments

Hopefully this helps folks to avoid my mistakes. I did a tally last night of the contributions I've made since I've been working back in the mid to late 90's, and it's sad but I'm negative for that time period.

I had invested in the Vanguard Aggressive Growth initially, then didn't like the performance and rolled it over to the Strong Enterprise Fund (SENTX) which focused on midcap companies and had a good expense ratio way back when...unfortunately for me, Wells Fargo bought out Strong, raised the expense ratio by like 0.5% and it's horrible and I never rolled out of it.

So I put in about $17,500 of my own $$$ into this non-deductible IRA (not that much in the grand scheme of course) but it's worth only $17,000 right now...that's like 15 years of my life wasted on these investments when the "bank of the mattress" would've been safer.

Just negative compounding...in addition to 2 recessions and bad timing

So anyway lessons learned (and mistakes made by me) include doing LARGE lump sum purchases rather than dollar cost averaging since I never knew if I'd have the $$$ to put into an IRA until after I received a bonus since all other $$$ was allocated into other things (ie: 401K, mortgage and some non-retirement investments).

I would make $2000 or $4000 payments (back when the IRA limits were smaller) say right before April 15th for the previous year and the market was never in my favor as I never knew if I could afford to put the $$$ in.

Yeah, so I'm a tad discouraged about investing more $$$ in any IRA now...am thinking about rolling that Wells Fargo IRA into some Vanguard target fund to at least cut the expenses down (maybe the 2030?) .

Can't complain too much as my 401K is relatively healthy at the moment and I just re-allocated recently to match my age in terms of risks, etc

Hopefully others can avoid these mistakes that I've made, but life goes on and I'm healthy and pretty happy at the moment.
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Old 04-15-2010, 02:15 PM   #2
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Well at least it wasn't a lot of money. I had employee stock options that were worth $1.3 MM in 2008, cashed in $300 K of gains and now they are only worth a half a million. At least I cashed some in, and I can wait until 2012 hoping our stock gets back to 3 digits again. So my regrets are three orders of magnitude higher than yours.

Why don't you consider waiting until the value gets back to $17,500 and then do a Roth conversion? You will owe no taxes on the conversion and then no RMD's and all comes out tax free. Assuming you have no other, deductible IRA's.
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Old 04-15-2010, 05:53 PM   #3
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I would not wait for it to return to $17,500... I would go ahead an do a Roth conversion now.

I like VG because of the solid performance of most funds and low cost.
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Old 04-15-2010, 06:15 PM   #4
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I would roll it over to Vanguard now, too, if you can do that without incurring any big fees. Low fees really do help.

What really bothers me about this post is the title. Do you REALLY feel that you completely wasted 15 years of your life, just due to some bad IRA investments? Surely you have some pleasant memories of those 15 years. Life is more than one's investments.
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Old 04-15-2010, 06:43 PM   #5
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I was thinking about this on the drive home and realized there is no reason to wait - there are no taxes due on the conversion as long as the balance is < or = to your basis - so even though you can't deduct the (tiny) loss you may as well do the conversion now.

My Roth and my wife's are in Vanguard Total Stock Market. My 16 yo son's is in STAR because his balance isn't big enough for anything else. Will put him into TSM once he has another summer or two of employment under his belt.
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Old 04-15-2010, 07:32 PM   #6
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I also would roll it to a VG Roth now. Not making any growth on $17.5K over 15 years is not the sort thing to be too upset over. Just roll it and forget
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Old 04-15-2010, 10:51 PM   #7
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I agree with the others. 17.5K is a pittance in the bigger scheme of things. Roll it over now.
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Old 04-16-2010, 07:16 AM   #8
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I also would roll it to a VG Roth now. Not making any growth on $17.5K over 15 years is not the sort thing to be too upset over. Just roll it and forget
Yup. You can save your capital losses and deduct a little each year.
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Old 04-16-2010, 05:59 PM   #9
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My biggest mistake was holding on to a stock, hoping it would get back to even so I didn't lose anything. What I learned is that a bad investment is a bad investment and you'll lose more on it by holding it until it gets back to even, when you could have invested in something that takes off.
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