5k into Roth IRA?

[stockstradr]

Too early to start buying stocks? What about recently when the S&P500 bottomed at 750 during the week of Nov 20th?

I don’t mean to nitpick, but consider these points:

1) Just last week most oil stocks were at new lows with oil at $40/bbl. Trust me that oil stocks were then (and probably still are) a bargain. The oil stocks I bought then (7 days ago) are now up 15% on average, and some (like PBR) are up 20%.

Consider: 15% is a fine return for stocks in a retirement portfolio over a FULL YEAR, yet in THIS market I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money. Some stocks are very worth buying NOW, and I don’t mean for a quick “pump and dump” ; I mean worthy to buy then HOLD for years to come.

2) Lot’s of GREAT stocks recently hit lows, particularly during the week of Nov 20th when the S&P500 bottomed at 750. I’m talking about stocks like Wells Fargo, which was about $22 on Nov 20th when I bought it. It is now just under $33.

How about Flextronics? I’m not saying that is a stellar CM (contract manufacturer) by any stretch, but what about at a price of $1.50 share during the week of NOv 20th? That day I bought ten grand at $1.60 and then dumped it a few days later for $2.10. I made over 20% on that in just three days. Yet that stock is now sitting at $2.40 (I should have kept it!)

So many bargains. I could go on and on. Honestly, some days it feels like shooting fish in a barrel. Too easy.

3) However, I do agree it is too early in this business cycle for anyone to just go buy random diversified stock funds (why would you do that anyway?), also too early to buy (and hold) the indexes.

Yet, don’t completely turn your back on this market. Pick through the bodies and the blood and you’ll find some real bargains!

Do you know what I did to my ROTH IRA since Oct 2007? I increased it by 82%. Absolutely no joke. I just audited all the trades in that account this weekend, to calculate my YTD net appreciation. However, I do admit that is the account in which I place all my options trades, so I used extreme risk and leverage to get that gain. That account also only contains only 25% of my total portfolio (and no way did I manage to pull 82% across my entire portfolio – dream on)

IMPORTANT: the above advice (to make quick money on speculative bets in this market) assumes that your $4K or $5K is a SMALL percentage of your overall retirement portfolio. If it isn’t then you should probably just put it in a money market fund.

[cooperthedog]

Definitely contribute to your ROTH. Its better to have the money tax sheltered, and you can still stay in “cash” if you wish.

In addition, have you considered selling cash-secured put options at the price your willing to buy the index at (Dow 7000 in your case)? You will receive relatively large premiums while the volatility is high. This still allows you to keep all your funds in a money market (plus the premium from selling the option). I’d recommend options 1-3 months out. The risk is that the index blows through your “7000” strike price (since you will be assigned at that price), this also makes the option much more valuable, thus closing out the position will cost considerably more then the index level at the time (closing out the position before expiration could result a net a loss even if the underlying is above the strike). If this interests you, familiarize yourself with options thoroughly.

[cooperthedog]

Definitely contribute to your ROTH. Its better to have the money tax sheltered, and you can still stay in “cash” if you wish.

In addition, have you considered selling cash-secured put options at the price your willing to buy the index at (Dow 7000 in your case)? You will receive relatively large premiums while the volatility is high. This still allows you to keep all your funds in a money market (plus the premium from selling the option). I’d recommend options 1-3 months out. The risk is that the index blows through your “7000” strike price (since you will be assigned at that price), this also makes the option much more valuable, thus closing out the position will cost considerably more then the index level at the time (closing out the position before expiration could result a net a loss even if the underlying is above the strike). If this interests you, familiarize yourself with options thoroughly.

[cooperthedog]

Definitely contribute to your ROTH. Its better to have the money tax sheltered, and you can still stay in “cash” if you wish.

In addition, have you considered selling cash-secured put options at the price your willing to buy the index at (Dow 7000 in your case)? You will receive relatively large premiums while the volatility is high. This still allows you to keep all your funds in a money market (plus the premium from selling the option). I’d recommend options 1-3 months out. The risk is that the index blows through your “7000” strike price (since you will be assigned at that price), this also makes the option much more valuable, thus closing out the position will cost considerably more then the index level at the time (closing out the position before expiration could result a net a loss even if the underlying is above the strike). If this interests you, familiarize yourself with options thoroughly.

[cooperthedog]

Definitely contribute to your ROTH. Its better to have the money tax sheltered, and you can still stay in “cash” if you wish.

In addition, have you considered selling cash-secured put options at the price your willing to buy the index at (Dow 7000 in your case)? You will receive relatively large premiums while the volatility is high. This still allows you to keep all your funds in a money market (plus the premium from selling the option). I’d recommend options 1-3 months out. The risk is that the index blows through your “7000” strike price (since you will be assigned at that price), this also makes the option much more valuable, thus closing out the position will cost considerably more then the index level at the time (closing out the position before expiration could result a net a loss even if the underlying is above the strike). If this interests you, familiarize yourself with options thoroughly.

[cooperthedog]

Definitely contribute to your ROTH. Its better to have the money tax sheltered, and you can still stay in “cash” if you wish.

In addition, have you considered selling cash-secured put options at the price your willing to buy the index at (Dow 7000 in your case)? You will receive relatively large premiums while the volatility is high. This still allows you to keep all your funds in a money market (plus the premium from selling the option). I’d recommend options 1-3 months out. The risk is that the index blows through your “7000” strike price (since you will be assigned at that price), this also makes the option much more valuable, thus closing out the position will cost considerably more then the index level at the time (closing out the position before expiration could result a net a loss even if the underlying is above the strike). If this interests you, familiarize yourself with options thoroughly.

[cooperthedog]

[quote=stockstradr]I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money.
[/quote]

There is no such thing as “easy money”, it always comes with risk.

[cooperthedog]

[quote=stockstradr]I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money.
[/quote]

There is no such thing as “easy money”, it always comes with risk.

[cooperthedog]

[quote=stockstradr]I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money.
[/quote]

There is no such thing as “easy money”, it always comes with risk.

[cooperthedog]

[quote=stockstradr]I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money.
[/quote]

There is no such thing as “easy money”, it always comes with risk.

[cooperthedog]

[quote=stockstradr]I just showed you how easy to get that 15% in just seven days. There is money to be made, easy money.
[/quote]

There is no such thing as “easy money”, it always comes with risk.

[sd_bear]

stockstradr,

unfortunately im 26, 5k is 20% of my retirement portfolio. i know you deal with stocks all day but i don’t have the time, the patience, or the stomach to watch the wild swings and try to make a quick buck. i do appreciate the advice but i can’t commit to strategy’s like that right now.

i haven’t turned my back on stocks overall. ive had indexes since i was a kid, which is where the majority of my money has been, but for the retirement portion of my assets i was looking to be a bit more conservative in this climate and did not want to dedicate hours each day to manage it.

[sd_bear]

stockstradr,

unfortunately im 26, 5k is 20% of my retirement portfolio. i know you deal with stocks all day but i don’t have the time, the patience, or the stomach to watch the wild swings and try to make a quick buck. i do appreciate the advice but i can’t commit to strategy’s like that right now.

i haven’t turned my back on stocks overall. ive had indexes since i was a kid, which is where the majority of my money has been, but for the retirement portion of my assets i was looking to be a bit more conservative in this climate and did not want to dedicate hours each day to manage it.

[sd_bear]

stockstradr,

unfortunately im 26, 5k is 20% of my retirement portfolio. i know you deal with stocks all day but i don’t have the time, the patience, or the stomach to watch the wild swings and try to make a quick buck. i do appreciate the advice but i can’t commit to strategy’s like that right now.

i haven’t turned my back on stocks overall. ive had indexes since i was a kid, which is where the majority of my money has been, but for the retirement portion of my assets i was looking to be a bit more conservative in this climate and did not want to dedicate hours each day to manage it.

[sd_bear]

stockstradr,

unfortunately im 26, 5k is 20% of my retirement portfolio. i know you deal with stocks all day but i don’t have the time, the patience, or the stomach to watch the wild swings and try to make a quick buck. i do appreciate the advice but i can’t commit to strategy’s like that right now.

i haven’t turned my back on stocks overall. ive had indexes since i was a kid, which is where the majority of my money has been, but for the retirement portion of my assets i was looking to be a bit more conservative in this climate and did not want to dedicate hours each day to manage it.

[Author]

Posts