Why is my Putnam Roth IRA performing so badly and should i move my money?

Question

I am 28 years old. I work in insurance as a claims adjuster in ohio. my question is this. i opened a roth ira in 1999 with $2000.00. since then, i have contributed approximately $3800.00 over the last 6-7 years. While i understand that this is a long term investment, i am concerned with the fact that the account has yielded a measely $25.00 in 7 years. I feel like my money would posibly be better invested in a roth ira ran by another investment company. So..i was wondering how much of a difference it makes when you are choosing an investor to run your roth ira? Also, Since i have been investing in this putnam roth while the stock market was low, do i now have a higher earning potential if i do stay with my putnam. And Also , If the advice you have for me is that i should switch investors, can anyone recommend an IRA investor that has been performing better? i would appreciate any advice! Thanks

Answer 1

It is the particular investments you have, meaning the particular fund (not necessarily the company, but don't be afraid to buy another fund run by a different company).

First, you should look at the overall S&P 500 - from middle of 1999 to present, it has barely increased at all. The initial 2000 you put in was at a high point in the market. Just really bad timing. You should have seen good increases over the past 2 years (at least 20% over that time span.)

If you did not see a 20% increase over the past two years, then it is time to change what particluar instuments you are invested in. (If it is the Putnam fund, so be it.)

If it is a mutual fund it should be:
-lIn "Growth" category (you are young, you can afford a little risk)
-No Load (Front End or Deferred)
-Low expenses less than 1% if possible
-Diversified

OR you could try ETFs (Exchange-TradedFund) for your Roth IRA:
-very low expenses
-trade like stocks

I can't recommend something in particular because there are too many choices. If you want questions to ask your adviser:

-Is this a growth fund appropriate for my age?
-Are the expenses low?
-Has the fund manager been there at least 10 years?
-If it is an index fund, would it not be better to buy an ETF that does the same (like the Spider -symbol SPY)

>You can look up the first three questions yourself by browsing through Yahoo! finance.

That will start a good conversation.

Answer 2

Putnam Roth Ira

Answer 3

This Site Might Help You.

RE:
Why is my Putnam Roth IRA performing so badly and should i move my money?
I am 28 years old. I work in insurance as a claims adjuster in ohio. my question is this. i opened a roth ira in 1999 with $2000.00. since then, i have contributed approximately $3800.00 over the last 6-7 years. While i understand that this is a long term investment, i am concerned with the fact...

Answer 4

The advocate is right about Putnam. They have had a bad run for the last little while due managerial issues. That is why your IRA hasn't been performing well. I believe Putnam is beginning to get it together, but there are also other great mutual funds to get into. They don't necessarily have to be no load funds. There are great no loads but a lot of them carry high expense ratios. People don't realize that just because money isn't taken off the top of the investment that these mutual fund companies aren't getting paid. Diversify yourself with your funds. Just be carerful that the stocks in these funds don't overlap. If you have questions feel free to contact me.

Answer 5

Putnam has been in the down cycle 2 or 3 years now. Bad calls on investments. The last 2 or 3 years you would have been better throwing your money $1 or $2 at the time at the toilet,
flushing ever so often, you would lose less that way ! Pick 3 or 4 good domestic stocks yourself or get an exchange traded fund.

Answer 6

It's probably not the "roth IRA" part that's performing badly, it's probably the portfolio you have it assigned to. Are you up to speed on all your choices at Putnam?

Answer 7

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Good Luck and Best Wishes!

Answer 8

I have similar issues with my UBS P,W. IRA and annuity accounts.
they appear to be going nowhere.
almost the same amount of money as you..