10
It’s
IRA
season as investors rush to get in before the
April
15
deadline, but in truth it’s always
IRA
season.
As Christine Benz points out on Page
16
, you can start
your
IRA 15
months before that deadline.Think how
much more you’d have if you started your
IRA
in Jan-
uary
2013
rather than April
2014
. Most years won’t
be that great, but the market does go up most years.
With that in mind, here are some great funds for
your
IRA
that you can put to use as soon as you free
up the money.
Vanguard Target Retirement 2030
VTHRX
This fund is a great set-it-and-forget-it option for your
IRA
. It’s cheap, covers a wide swath of the invest-
able market, and adjusts over time. If you already
have plenty of funds, here’s a way to simplify things
by giving you one account that you don’t have to
fret over. Vanguard has target-date funds that aim for
a retirement date every five years, so you should
be able to find one that syncs up with your retirement
plans. The funds hold varying mixes of
Vanguard
Total Stock Market Index
VTSMX
,
Vanguard Total
International Stock Index
VGTSX
,
Vanguard
Total Bond Market II Index
VTBIX
, and
Vanguard
Total International Bond Market Index
VTIBX
.
Dodge & Cox Global Stock
DODWX
Staying with my wide-net theme, I have chosen a
world-stock fund that covers a lot of ground. Dodge
&
Cox Global Stock builds off of Dodge’s strength in
researching stocks around the globe. It takes a value
bent and has the patience to see the payoff. But
don’t look for Dodge to hop around in search of the
best markets. It tends to move slowly. This is more
of a pure issue-selection vehicle. With a deep team
and low expenses of just
0
.
65%
, this should be a
fund you can own for a long time.
FPA Crescent
FPACX
Steve Romick’s fund doesn’t cover nearly as much
ground as the above options, but its mix of aggression
and caution still make it a strong choice for your
IRA
.
Romick looks for cheap stocks with strong long-term
potential, but he doesn’t stop there. He looks for
other creative ways to generate strong returns, includ-
ing unusual debt or real estate deals, as well as
bonds. He also typically holds a big slug of cash.
The result is a fund that generally loses less in down
markets while still enjoying respectable returns
in rallies.
Loomis Sayles Bond
LSBDX
Many investors like to put a bond fund in their
IRA
because they don’t have to pay taxes on the income.
However,
IRA
s are meant to be long-term holdings,
so you want some strong return potential. Dan Fuss
and team deliver that in this wide-ranging bond
fund. They buy lots of lower-quality debt from corpo-
rate issuers and foreign countries. They even buy
convertibles and a small amount of stocks. The record
here is outstanding, but be wary of that credit risk.
This fund will feel it when we hit the next pothole in
the economy. It’s best for investors who have very
little high-yield or foreign debt exposure today. If you
already have a lot, this is probably not the time to
raise your bets.
Harding Loevner Emerging Markets
HLEMX
There aren’t many contrarian bets to make today, but
emerging markets lost money in
2013
’s big equity
rally, and with signs of slowing growth in China they
may continue downward. But valuations may be
cheap enough to make emerging markets a good buy
anyway. Harding Loevner isn’t a household name,
but it has impressed us with its expertise in finding
bargains in a lot of markets. Its approach is to find
quality at a modest price. It has done such a good job
that the fund has strong long-term returns and
typically loses less in downturns.
œ
Contact Russ Kinnel at
5 Favorites for Your IRA
The Contrarian
|
Russel Kinnel
Our Contrarian Approach
I go against the grain to find
overlooked funds that may be
ready to rally.
