Help. Do i cut my mom's losses

[livingalmostlarge]

I attached a nice pdf of my mom's roth IRA. Do I sell her stocks most of the and the BBN muni fund?

This was what happened with the Raymond James investment advisor she had. The VOO, VTI, IJR, IJH were suggestions from her having so much cash in her Roth IRA earning 0.1% unfortunately bought in 11/2021. But she has no plans to ever use the Roth IRA at all and doesn't need too.

So do I clean up the mess and sell everything and start fresh with just VOO and BND? Yes I know she paid a ton of fees for nothing. But it's the past and we have to move forward.

I'm pretty low maintenance and pressed for time. I moved it to charles schwab where I have my stuff since TD ameritrade got aqcuired. I do have a moment of hesitation of selling everything. It'll get worse when i post about my dad's and the taxable account.

 

[pb4uski]

Way too many tickers for a portfolio that size.

If you and your Mom want simple then decide an AA that you are comfortable and buy a balanced fund. If she prefers more conservative then buy a rolling CD ladder.

ETA: The preferred issues don't look too bad... decent credits and decent dividend yields.

 

[Phroig]

Way too many tickers for a portfolio that size.

If you and your Mom want simple then decide an AA that you are comfortable and buy a balanced fund. If she prefers more conservative then buy a rolling CD ladder.

+1. Assuming her tax rate's low, you don't need to worry about capital gains taxes. I don't see BBN in the list, but it's a taxable muni CEF. It has steadily cut its distribution (which includes some ROC) and the discount has recently widened.

 

[pb4uski]

^^^ OP indicates it is in a Roth.

I attached a nice pdf of my mom's roth IRA. ...

 

[Sunset]

OP - You have already done a good thing, as now she won't pay high fees, probably saving her $4K or more per year.

There is no rush now, I see nothing wrong with the last 4. I'd keep them, while looking at simplifying by getting rid of many of the others, over time.

I'd not be interested in BND at all, rather buy actual CD's or Treasury bills making a ladder, because of BND paying about 2.5% instead of 5.3%. Also since you say she won't be using the Roth, I'd be inclined to be heavy into stocks if you expect the roth to remain there for a decade or more.

 

[ut2sua]

I attached a nice pdf of my mom's roth IRA. Do I sell her stocks most of the and the BBN muni fund?

This was what happened with the Raymond James investment advisor she had. The VOO, VTI, IJR, IJH were suggestions from her having so much cash in her Roth IRA earning 0.1% unfortunately bought in 11/2021. But she has no plans to ever use the Roth IRA at all and doesn't need too.

So do I clean up the mess and sell everything and start fresh with just VOO and BND? Yes I know she paid a ton of fees for nothing. But it's the past and we have to move forward.

I'm pretty low maintenance and pressed for time. I moved it to charles schwab where I have my stuff since TD ameritrade got aqcuired. I do have a moment of hesitation of selling everything. It'll get worse when i post about my dad's and the taxable account.

The good news is this is a Roth account, so there will be no tax consequences. The list gave me a head-ache just looking at it. If it were me, I would sell them all and buy VTI or VT. Good luck

 

[DrRoy]

+1 to simplify.

 

[livingalmostlarge]

My mom doesn't care and I have POA finally. It's been a long process of about a decade to slowly get here. I'm trying to clean up the mess but I feel guilty at selling all this stuff at losses that she's been put into.

I"m moving my dad's stuff as well. It's a really slow process since I had to talk to my mom in person with a lot of it.

I'm leaning to selling everything even the losses in the Roth and just keeping it in small and mid cap etfs.

She's not using the roth nor will she ever and my two kids are beneficiaries. So another 30 years until it's even touched.

 

[Sunset]

My mom doesn't care and I have POA finally. It's been a long process of about a decade to slowly get here. I'm trying to clean up the mess but I feel guilty at selling all this stuff at losses that she's been put into.

I"m moving my dad's stuff as well. It's a really slow process since I had to talk to my mom in person with a lot of it.

I'm leaning to selling everything even the losses in the Roth and just keeping it in small and mid cap etfs.

She's not using the roth nor will she ever and my two kids are beneficiaries. So another 30 years until it's even touched.

I think you should take a breath or two, regarding your mom's account. The move is done which is the big saver over time due to removal of the extra fees.

But to just sell everything probably is an emotional reaction.

I disagree with putting all in small and mid cap etf's, why would you think this is better than small, mid, and large caps over a 30 year period.

Also I have to wonder if it looks like she has a bunch of losers, simply due to churn effect. Instead of something being bought and held for decades, lots was probably sold and bought every year to generate commissions. The result is much would be relatively newly bought and has a loss showing.

There is no advantage to selling good holdings in the Roth like VOO or VTI even if they currently show a loss.

 

[livingalmostlarge]

I was leaning to selling all stocks but msft and amzn, then keeping the IJR, VOO, IJH, and VTI and then putting more money into mostly IJR and IJH and maybe some VOO.

I had them put it the $160k in November 2021 into those four funds because it was just sitting in cash. Now i'm thinking of just selling the rest of the stuff including the preferred stocks and putting it into the ETFs.

This is all in roth. It's more that I am feeling bad about selling all these losers. The current ETFs i'm not worried about. This is long term but all the stocks and stupid muni bond fund are dogs.

 

[2017ish]

...
She's not using the roth nor will she ever and my two kids are beneficiaries. So another 30 years until it's even touched.

It sounds like your mother is elderly? IF so, 30 years could be unlikely. After the SECURE act, the Roth would need to be emptied by 10 years after her death, regardless of age of the inheritor--unless your kids would qualify as chronically ill or disabled. (minor children only get a break if their parent was the original IRA owner). Of course, the investments held in the Roth could be distributed to your kids in kind ....

 

[RetiredAt49]

I'm pretty low maintenance and pressed for time.

I understand this sentiment/feeling. There’s also a ton of financial/investment info online - including this community. However, whether you follow Jack Bogle’s 3 fund approach or Warren Buffett’s two fund approach, you are on the right track. For me personally, I have a 100% stock portfolio (excluding rentals) and nearly all of it is in low cost index funds like VOO and VTI (I use these as tax loss harvesting partners in taxable account) as well as QQQ.

 

[RetireBy90]

My view on holdings that are at a loss is they are only worth what they are worth today. I look at it as I have $x today, what is the best use or investment for that money today. Would you buy the holdings today, are they depressed and you think they are due for a rebound? I bought BA and still have a bit of paper loss, but I think they will continue recovery so a hold or buy today. I also had VZ and it kept dropping. I don’t see any change for them so sold at a loss. YMMV

 

[RetiredHappy]

Take your time in selling the stocks and buyiing etfs instead. Don't forget that the losses which you see coincides with the down market.

 

[badatmath]

It sounds like your mother is elderly? IF so, 30 years could be unlikely. After the SECURE act, the Roth would need to be emptied by 10 years after her death, regardless of age of the inheritor--unless your kids would qualify as chronically ill or disabled. (minor children only get a break if their parent was the original IRA owner). Of course, the investments held in the Roth could be distributed to your kids in kind ....

+1

 

[livingalmostlarge]

It sounds like your mother is elderly? IF so, 30 years could be unlikely. After the SECURE act, the Roth would need to be emptied by 10 years after her death, regardless of age of the inheritor--unless your kids would qualify as chronically ill or disabled. (minor children only get a break if their parent was the original IRA owner). Of course, the investments held in the Roth could be distributed to your kids in kind ....

My mom is 71 an excellent health and longetivity runs in the family. So 20 years or more for her and 10 years for my kids to empty her roth. So 30 years. Women in my family are easily 90+ more like 95+ long life.

And she's got a pension, SS, free medical for life (including all premiums for medicare paid off, her supplemental is blue cross and free) and paid for homes. So needing the roth is really gravy. She needs to tap everything else first. The larger home will eventually be sold and that would provide money for at help along with her monthly guaranteed income (state retiree).

But I'm leaning to simplifying and also saying that the stocks she has are terrible and aren't rebounding like just the VOO or VTI or IJH or IJR or QQQ. I'm more interested in those simple etfs than her stocks. She'd have made way more if she had over the past ten years instead of losing money.

Of course not paying Raymond James Fees will help a lot.

 

[Koolau]

Of course not paying Raymond James Fees will help a lot.

This!

 

[Phroig]

Sorry I missed "Roth" in your first sentence; I think I also missed the second page of the PDF. (I need to avoid skimming and responding to posts on my phone.)

Since this is money your mom won't need and that'll probably go to your kids in 20-30 years, you don't need any fixed income in there. Just invest it all in equities for tax-free growth.

VOO+IJR+IJF more or less duplicates VTI. Why not just put it all in VTI? One holding is as simple as it can get. If you want international equities for some diversification, you can add VXUS.

 

[Koolau]

Couch Potato portfolio as originally "invented" by Scott Burns. It's just one or two equity funds (like all-world) or S&P 500 plus one or two bond funds. Balance once a year. Nearly a set and forget (well, not quite.)

 

[Morgan22]

Sorry I missed "Roth" in your first sentence; I think I also missed the second page of the PDF. (I need to avoid skimming and responding to posts on my phone.)

Since this is money your mom won't need and that'll probably go to your kids in 20-30 years, you don't need any fixed income in there. Just invest it all in equities for tax-free growth.

VOO+IJR+IJF more or less duplicates VTI. Why not just put it all in VTI? One holding is as simple as it can get. If you want international equities for some diversification, you can add VXUS.

Agree ^^^

Just put it all in total stock market ETF VTI.

 

[HarveyS]

Do you have any siblings you should consult with?

 

[HarveyS]

It looks like the portfolio was built with a majority of high(er) dividend payers. Was that the plan your Mother had in place?