You Can’t Time the Market
As much as we like speculating on the market movements, experienced investors will tell you that, “You Can’t Time the Market.” Market fluctuations, risk and loss of principal are inherent when you invest.
We recommend you consider a dollar-cost averaging strategy – investing a fixed amount on a regular basis. This strategy does not ensure a profit or prevent a loss.
It is a commitment to make a continuous fixed investment in securities in spite of fluctuating share prices and market conditions.
When you make a continuous fixed investment, a drop in the share price means you will purchase more shares with the same fixed amount. When the share price rises, you could benefit from a lower average cost per share.
If you are investing in a workplace retirement plan, through regular payroll deductions, you are already practicing dollar-cost averaging. You can also follow this strategy outside the workplace through automatic contributions to an IRA or other investments.
Backdoor Roth
A backdoor Roth IRA is a way for people with high incomes to sidestep the Roth’s income limits.
Basically, a backdoor Roth IRA boils down to some fancy administrative work: You put money in a traditional IRA, convert your contributed funds into a Roth IRA, pay some taxes and you are done. Even though you didn’t qualify to contribute to a Roth, you get to go in the back door anyway, no matter what your income is.
That’s good news, because your money grows tax-free – and that’s a pretty sweet perk when it comes time to take your money out in retirement.
If your income is above the Roth IRA limits, a backdoor Roth might be a good solution for you.
If you have an interest in either of these topics, we have expertise in both and would welcome discussing them with you and how they apply to your unique situation.
