Should I my to go 100% on ? Once again, Ive been involved in the and I realized that I would have received a bigger gain than if I would have just kept my in my . Should I just 100% in the and get serious?

 

  • John W 5:55 am on October 21, 2010

    Why is it that people only ever think of being 100% invested in one thing or the other? Imagine if you had half your portfolio in cash and half in a stock, if the stock went down, the percentage of your portfolio that is cash would be greater than 50% so you would buy shares till it was 50% again thereby taking advantage of the bargain prices, if the stocks went up, you would sell shares to return to the 50% position thereby locking in some profit effectively buying low selling high. How many people lamented not having the cash to invest in the bargain prices after a downturn simply because they were 100% invested. When you are 100% invested, there’s nothing you can do except go along for the ride and if you jump from 100% invested in one thing to 100% invested in another, you either win or lose big time. Another way to look at it is if you had a weighted coin that would flip heads 95% of the time, so how much would you bet on each flip, the more you bet, the more you win but if you bet 100% of what you have with each flip, you will eventually lose it all. 100% invested in anything is a bad idea unless it’s a sure thing.

    The distinction that I see between mutual funds and the stock market is that the stocks in the mutual funds is being invested under somebody else’s control and hence I could incur capital gain taxes that I had not planned for. To counter this, I hold mutual funds in IRA’s, Roth IRA’s and 401k’s while holding stocks in my brokerage account. At least that way, I know what tax implications I’m incurring from the trades and dividends.

  • zuma 5:55 am on October 21, 2010

    No….Both..Diversity is important..The right mutual fund matched your average return of stocks., Depending when you bought in….Unless you bought an Index Fund?

  • eve 5:55 am on October 21, 2010

    Im wondering the same thing… My poor mutual funds just sit there while I pay taxes on the activity. T.hey never recovered after sept 08. While I’ m making a nice profit in my stock picks.
    I asked(emailed ) 2 tv shows that take questions but no one answered. I don’t think you need mutual funds unless its something like emerging funds, if you don’t invest in stocks in that sector.

  • The Son of Rage and Love 5:55 am on October 21, 2010

    I think you can do well in both. A well managed mutual fund (not an index fund in today’s world, you can’t depend on the overall market going up) can get a good return. My experience in the past few years has been that my individual stock account has treaded water while my mutual fund accounts have done pretty well.

  • thomas p 5:55 am on October 21, 2010

    Yes. It would be important to speak with your tax expert about the mutual fund distribution dates to avoid being taxed for earnings never paid. Mutual funds really on make sense in an IRA or other tax deferred or exempt retirement vehicle.