Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!watmath!clyde!floyd!harpo!decvax!cca!ima!haddock!johnl From: johnl@haddock.UUCP Newsgroups: net.invest Subject: Re: IRA INVESTMENT DIRECTION QUESTION - (nf) Message-ID: <76@haddock.UUCP> Date: Mon, 5-Mar-84 23:37:07 EST Article-I.D.: haddock.76 Posted: Mon Mar 5 23:37:07 1984 Date-Received: Wed, 7-Mar-84 07:22:25 EST Lines: 44 #R:eisx:-69500:haddock:11900003:000:2316 haddock!johnl Mar 4 18:45:00 1984 If your prime goal in managing your IRA is safety, then indeed a sensible strategy is to diversify, although it seems to me that putting the money in a bank IRA account which is insured by the government and pays in the vicinity of 10% is even safer. On the other hand, if you're in your 20s or 30s, you aren't going to be taking any money out of your IRA for 30 or 40 years, and you'll probably be making a lot more in the future than you are now. This means that safety may well not be your primary goal at this point. You might consider wild speculation. Historically, the overall return from risky investments is much better than from conservative ones, although the variation is a lot more. (This is why U.S. government bonds pay relatively low interest - there are few surprises.) So if you take a bunch of flyers now, a few of them might hit, and the odds are that you'll make more than if you stuck with a bank, mutual fund, or other conservative investment. You can always switch to more conservative investments later if you get nervous, and when you're older and richer, you'll likely be able to save more if you still need to. Moreover, most of you reading this have an advantage over the general public in that you know a lot about computers and can make better assessments than most people about computer stocks, at least. [For example, it's pretty clear to me that companies making IBM PC knockoffs are in trouble, since IBM has shown that they want the whole market; e.g. the new portable PC does roughly the same as a Compaq and costs slightly less. Compaq is OK for now, since they have a portable XT and IBM doesn't, but the handwriting's on the wall. Same for Eagle, Corona, etc. Better to find somebody with products that go into some niche IBM doesn't or else complement IBM stuff like Lotus does. End of digression.] Now, if you're the kind of person who gets nervous every time your NYNEX stock dips a quarter of a point, or if you find financial reports baffling, the risky strategy isn't for you. But if you don't need the money right away (clearly, or you wouldn't put it in an IRA), are willing to take the risk of losing it, and have some interest in researching stocks and stuff, it's worth a thought. John Levine, ima!johnl PS: I have this great oil drilling deal ...