My IRA didn’t get smoked by the recession…
Sure, I lost some, but no where near as much as I could have or as much as my other investing account (which I haven’t updated the post on here because of how bad it got). However, I guess I can feel proud from my IRA when it only dropped 16.67% through the entire fall of the market, compared to the drop of 11,400 to 8400 in the Dow (26.4%).
Part of this came from the fact that I don’t actually have much in my IRA, given I’m only like 25 and I’ve just started to fund it for year 2008 (although I still plan to max it out by April, 2009). The other part came from a lack of diversification, which is due to the lack of funds. Through the majority of this downturn I had my money in 2 funds:
-IShares 7-10 Year Treasury Bond, currently yielding 4.01% (Symbol: IEF)
-IShares iBoxx $ High Yield Corporate Bond Fun, currently yielding 11.0% (Symbol: HYG)
I figured the best way to get through the market was to just buy bonds right now, as they do go up in value as the interest rate falls. Granted, “High Yield” is just another term for Junk Bond, and having the ETFs are another way for diversification.
Of these two, the only one that went down was HYG, and that lost about 1/3 of the value, but the treasury stock went up. And this was before the .5% in dividend payments I receive per month. So, in actuality, I’m down ~10% in this dowturn, a full 15% less than the Dow.
I recently purchased the Gold ETF (GLD) which i talk about trades a lot in my normal portfolio but at $70/share that is an easy long term investment surrounded by several near term trades (since there is no yield).
