I just opened a Roth IRA, and am ready to invest in the stock market

[TurboMinivan]

Well, it's 2022. The market is closed today, of course, but I was still able to log in to my account and initiate my lump sum $7k deposit, the maximum allowed for the new year. Now when the market opens on Monday morning, I can immediately deploy those funds into various holdings.

My plan for 2022 is to go Defensive.** My desired (target) portfolio distribution is 50% Defensive, 35% Cyclical and 15% Sensitive... but I've really let this slide and my current distribution is actually 35.9%/43.1%/21.0%. To help get me back on track, I'm going to put $3k into a new position with PNW, and add another $1k each to MO, ABBV and VZ (which are all Defensive holdings). The last grand will get added to my UNM hoilding (which is Cyclical). Also, I am considering liquidating my very small position in DOW (a Sensitive holding, and one of the very first stocks I bought before I had developed any real long-term stock strategy) and using that money to add to my MAIN holding (which is Cyclical). That will just about do it for 2022 for me.

**: while stocks can be generally divided into eleven general sectors, they are sometimes grouped into just three larger super sectors. Defensive stocks are so named because their businesses are recession resistant; Cyclical companies routinely go through up and down cycles which are not necessarily tied to the economy in general; Sensitive companies are more heavily impacted by the current state of the economy.

 

[spaggyroe]

It looks like I finished 2021 at +26.11% overall.

I personally don't think 2022 is going to perform as strong as 2021.
With the fed announcing numerous rate increases in 2022, housing market being overheated, and supply chain issues continuing, I just don't think it'll be a stellar year... Hopefully I'm wrong.

In the mean time, I'll continue on with my same boring investment plan of buying index funds every month.

 

[Greg]

It looks like I finished 2021 at +26.11% overall.

I personally don't think 2022 is going to perform as strong as 2021.
With the fed announcing numerous rate increases in 2022, housing market being overheated, and supply chain issues continuing, I just don't think it'll be a stellar year... Hopefully I'm wrong.

In the mean time, I'll continue on with my same boring investment plan of buying index funds every month.

That's impressive, considering how things turned towards the end of the year. I had been averaging 30% with my 401k most of the year, then the last 4 months killed me. I ended the year at 19%... 😲

I agree on the outlook for 2022, but I hope you're wrong because I could use some strong growth!

 

[spaggyroe]

That's impressive, considering how things turned towards the end of the year. I had been averaging 30% with my 401k most of the year, then the last 4 months killed me. I ended the year at 19%... 😲

I agree on the outlook for 2022, but I hope you're wrong because I could use some strong growth!

Nah, nothing special about my portfolio Greg. Mine tracks very closely to the S&P 500, which made 26.9% in 2021.

19% is still damn good.
In my retirement planning spreadsheet, I assume an 8% average annual return. Anything above that makes me happy. 😎

 

[TurboMinivan]

In the mean time, I'll continue on with my same boring investment plan of buying index funds every month.

As we've discussed, this is a winning formula which--quite frankly--gives you the highest odds of success. That is precisely why it's what I'm doing in my 401k and HSA.

In my retirement planning spreadsheet, I assume an 8% average annual return. Anything above that makes me happy. 😎

Exactly. When doing predictive calculations, always use conservative figures. (But when you invest, always contribute as if those numbers were far too liberal!)

 

[glockman]

I agree on the outlook for 2022, but I hope you're wrong because I could use some strong growth!

A weak 2022 just means more opportunities to buy stock at a discount 😁. I'm far from retirement so lower markets this year don't scare me, if anything it is encouraging me to invest more. I think dollar cost averaging over 22 will help offset some high purchase prices I paid in 21.

 

[nnnnnate]

Just checked my year end statement and managed 19.5% on the 401k. I fiddled around with it a few times last year where I had mostly stuck with target retirement funds and I adjusted to about 40/60 with an index tracking the S&P500 on the 60% side. I'm happy with how that went and just tweaked the balances again and also adjusted where my future contributions will land.

I'm also not super optimistic on how things will go this (2022) year with the market but at the same time I didn't expect to get almost 20% growth last year either. I guess I'll just continue to hope for the best and continue to let direct deposit do its thing.

 

[N-Smooth]

21% for me and that's with a mix that Vanguard picked 🤷‍♂️

 

[Greg]

21% for me and that's with a mix that Vanguard picked 🤷‍♂️

Not bad at all!

 

[Greg]

Anyone familiar with MPI? Sounds pretty impressive.

 

[TurboMinivan]

Anyone familiar with MPI?

I've never heard of it. I'll have to watch this video, then come back and comment.

 

[spaggyroe]

Anyone familiar with MPI? Sounds pretty impressive.

Looks to be similar to an Indexed Universal Life plan/fund.
That makes me a bit queasy personally. I shy away from all "life insurance as an investment" options that are out there.

Just my $.02 Greg.

 

[Unimog]

Looks to be similar to an Indexed Universal Life plan/fund.

I agree. I have some investments in plans similar to this, but I wouldn't trust anyone that says you can make 4x as much as a traditional investment. There are good reasons to use an indexed fund, whether life insurance based or not. There are yet other reasons to use a fund that has a floor on losses and a cap on gains. IMO, the primary reason to use what they are calling the "MPI" approach over traditional investments is for tax advantages as well as a side-benefit of the life insurance that comes along with it.

 

[mesha]

The AT&T spinoff to cost me a bit of the monthly dividends I have been working toward.

It bugs me that they can just spinoff and give me shares of a new company that doesn't pay dividends. Maybe I will sell the spinoff (WBD) and buy a dividend stock I am happy with.

 

[TurboMinivan]

The AT&T spinoff to cost me a bit of the monthly dividends I have been working toward.

Same here--I've got about 75 shares.

Maybe I will sell the spinoff (WBD) and buy a dividend stock I am happy with.

I am considering doing the same. In fact, I just logged on and placed a Limit order to do exactly that.

 

[mesha]

Same here--I've got about 75 shares.



I am considering doing the same. In fact, I just logged on and placed a Limit order to do exactly that.

I sold all my WBD and reallocated. I have a couple hundred shares....booo

 

[anderson750]

Does anybody have any experience with buying stocks in the Austrailian market?

 

[mesha]

Got both of my kids (13, 16) set up with a ROTH IRA and it is almost fully funded for the year. I am excited they can have so many years for the compound interest to grow.

 

[TurboMinivan]

Got both of my kids (13, 16) set up with a ROTH IRA and it is almost fully funded for the year.

Excellent!

Speaking of helping others set up accounts, back in December I talked my fiancee into opening a Roth IRA in 2021, and she barely made the cut... on December 30th IIRC. She had no money to invest at that moment, but at least the account was created in that year. This gave us until April 15th to back-contribute for her 2021 allowance, and we did manage to come up with the full $6000 amount before the cutoff date. Woo-hoo! We have yet to make any contributiions for 2022 for her, what with spending money on the wedding and all... but I'm planning to get her full amount contributed this calendar year if at all possible.

I keep tabs on her account, so I can congratulate her every dividend payday. Now that she's learned about passive income from corporate profits being shared with their stock holders, she has definitely caught the bug. She is looking forward to investing her maximum amount from this point forward. It is refreshing to have a partner with similar financial goals.

And like the rest of you, my 401k and HSA accounts (which are invested only in index funds) have taken a beating so far this year. My Roth is holding up better, but it is still down overall for the year to date. But other than $T, my dividend payments have not only held up, they've also been increasing. I know I won't be living off that income for quite a while longer, but it is still reassuring to know I can have income that increases even while the overall market is tanking.

Hang in there, everyone. Remember: successful investing is a long game.

 

[mesha]

Excellent!

Speaking of helping others set up accounts, back in December I talked my fiancee into opening a Roth IRA in 2021, and she barely made the cut... on December 30th IIRC. She had no money to invest at that moment, but at least the account was created in that year. This gave us until April 15th to back-contribute for her 2021 allowance, and we did manage to come up with the full $6000 amount before the cutoff date. Woo-hoo! We have yet to make any contributiions for 2022 for her, what with spending money on the wedding and all... but I'm planning to get her full amount contributed this calendar year if at all possible.

I keep tabs on her account, so I can congratulate her every dividend payday. Now that she's learned about passive income from corporate profits being shared with their stock holders, she had definitely caught the bug. She is looking forward to investing her maximum amount from this point forward. It is refreshing to have a partner with similar financial goals.

And like the rest of you, my 401k and HSA accounts (which are invested only in index funds) have taken a beating so far this year. My Roth is holding up better, but it is still down overall for the year to date. But other than $T, my dividend payments have not only held up, they've also been increasing. I know I won't be living off that income for quite a while longer, but it is still reassuring to know I can have income that increases even while the overall market is tanking.

Hang in there, everyone. Remember: successful investing is a long game.

That is so awesome! I love dividends. They are what really motivated me to start pushing myself to invest as much as I can. Now most of the money I make from side work goes into my dividend portfolio. I love watching them grow and it makes me way less anxious when the market is down because the dividends keep coming in. I recently hit a couple of big milestone goals I placed for myself with my portfolio and I am so excited.