transferring money from one IRA Fidelity mutual fund to another IRA Fidelity mutual fund
My husband and I are 82 and 80 years old. We have 1,300 shares in FSENX Fidelity energy fund traditional IRA accounts that have been there for years with more down periods than ups. We have held these hoping that someday, before we die, that they would recover the value that we paid for them. That time has come! So we want to transfer the money to a safe very low risk fund soon but we’re not knowledgeable or experienced in picking stocks. I’ve heard you and Ilyce Glink mention index funds before with low expense ratios. We think we should keep them in a no load Fidelity fund and see where they do have 62 index funds. Do you think this would be a good option? Or do you think some other fund would be safer? I know you don’t give specific stock picks but any advice you give would be appreciated. PS. My husband jokingly says, every 200-300 dollars we can count on in the future will pay for another day in a nursing home for one of us.
Terry Says
You’re already IN Fidelity — so almost any fund you choose there will be low cost. That’s a good start.
The idea of an INDEX fund is to get a diversified portfolio of stocks in any one category. The S&P 500 stock index fund invests in the largest blue-chip companies. A small company index fund will be more volatile than the S&P 500 index. And I can’t think of anything more volatile than an energy fund–index or not!
Do you have the disciplne not to look back and see what happens if you sell some or all of your energy fund shares now? If so, I would think you would diversify your portfolio by selling 1,000 of those energy fund shares, and putting half in the Fidelity Equity/Income fund — a bit more conservative.
If you don’t have any other cash reserves outside your IRA, you could put the other half in a money market fund, where you won’t earn much but won’t lose any! (Except to inflation.) At least you will sleep better that way. And you’ll have cash to take your RMDs as required.
