Lux Investing
How does our the value of the american dollar affect ira investing?
I am 25 and i have saved up the 4k i am allowed to invest in an ira how ever i have heard its better to invest it in december or monthly due to the fluctuations of the dollar value, i just dont understand how that makes a difference, can some one please break it down into something easy to understand...thanx
Public Comments
- an ira is a long term investment, dont worry about trying to time the market, it doesnt work, just pick a nice diversified mutual fund and keep it in there for the next 35 years a slight bump up or down now doesnt matter in the least 40 years from now, dont waste time trying to decide when, just decide where (what fund) and get that money to work now ideally, you put your 4k in now, and from now on invest the 333 a month or whatever it is from here on out investing monthly is the way to go because its easy, just have your fund company take it right out of your account, and investing monthly forces you to buy low, if the fund is down a little your money buys more shares, if its up alot you buy a few less shares, your average is less paid overall per share though hopefully you pick a nice fund and it goes steadily up what company are you with? pick a nice no load company like troweprice,fidelity,or vanguard or you will pay 5 or 6% of that 4k up front for sales charges , thats a couple hundred bucks that could go in your account and sit there for 40 years
- It rather depends on what you invest in, how the value of the dollar will affect your investments. I do not agree with the proposition stated in your question. The only advantage to investing in December that I know of is the tax selling effect caused by people selling their loosing positions to tax the tax write off. As for investing monthly, that is supposed to iron out the variances in the ups and downs of the stock market so that you get a decent average cost. I certainly do not know how the value of the dollar has a bearing. There are several ways in theory to invest to take advantage of the falling dollar. 1. invest in companies that have a lot of overseas business. Examples would include IBM, Microsoft, Intel, Catepiller, Deer, JNJ, MMM, ect. 2. Invest in foreign stocks such as Chinese, Japanese, Indian, Europe based, etc. As the dollar falls then these investments should become more valuable. 3. Invest in oil stocks. The price of oil is more or less set by OPEC. If the dollar falls, I am sure OPEC will increase the price of oil correspondingly. Oil is a good investment anyway. If you would rather invest in mutual funds or index funds, there are also plenty of those that you can taylor to take advantage of the falling dollar. Here are just a couple to give you an idea. GIM: invests in foreign government debt instruments. SWZ: invests in Swiss companies. CHN: invests in Chinese companies. CAF: invests also in Chinese companies but only in A shares. IIF and INF: invests in Indian companies. Fidelity, T Rowe Price, and Vanguard each have funds that are heavily invested in foreign stocks. I have to believe that the largest U S companies are going to increase their profits considerably because of the falling dollar. Every euro they sell overseas converts into more dollars as they bring the revenue home to roost.
