On this episode of "On the Money," Ruedi Wealth advisors and Dr. Fred Giertz discuss one of the most common questions we receive from clients and listeners: "Is now a good time to invest?"
Is Now a Good Time to Invest? (8:15)
“I don’t know where the market is going to go in the next day, or next month, or next year. What I can tell you is over long periods of time you will likely be better off investing, as long as your money actually belongs in the stock market.”
- Daniel Ruedi, RICP®
“It is important to know what you are getting yourself into depending on your asset allocation. You should be able to look back on the last three bear markets and see what your portfolio did at that time and ask yourself ‘can I handle this?’”
- Daniel Ruedi, RICP®
Read more: Is Now a Good Time to Invest?
Listener Question: What are the advantages and disadvantages of an inherited IRA from a grandparent to grandchildren? (15:27)
“If you give the inherited IRA to your grandchild instead of your child, that person is going to be younger. And what that allows them to do is stretch out those required minimum distributions (RMDs) even longer.”
- David Ruedi, CFP®, RICP®
“When the beneficiary inherits the IRA, they are going to have a required minimum distribution amount they have to withdraw from that account every single year. That amount depends on the age of the beneficiary, so the younger the beneficiary the smaller the (RMD) and the longer you get to keep that money in the IRA and let it grow tax-deferred.”
- David Ruedi, CFP®, RICP®
“You need to make sure you are comfortable with your grandchild from a responsibility standpoint – he or she should take out the whole balance of the inherited IRA, not just the RMD.”
- Daniel Ruedi, RICP®
“Make sure your beneficiary designations are properly done. Check with your advisor or lawyer that you are not going to do something that causes you to take the money out over a 5 year period. You don’t want to inadvertently have that ability to stretch those payments go from 30 or 40 years down to 5.”
- Paul A. Ruedi
Act on a financial plan to avoid emotions (22:32)
“When you have a portfolio in relation to a plan, you can look at how the plan performed in the type of market environments you are worried about and see if the decline you are worried about derailed the plan. If you see that a decline could happen and you could still spend the amount you want to spend, it gives you a lot of reassurance.”
- Daniel Ruedi, RICP®
Dollar Cost Averaging (24:22)
“I know that objectively about 2/3 of the time you are going to be worse off having dollar cost averaged. So you just explain to clients in the grand scheme of things it won’t make a difference, but it is probably going to cost you a little bit to do this.”
- David Ruedi, CFP®, RICP®
“There’s an optimal way to do things, and then there’s reality. Its just reality that some people can’t handle going in all at once. So find a happy medium.”
- Daniel Ruedi, RICP®
Consolidating investment accounts (38:25)
“Sometimes when you have too many accounts, you get older, and you forget about some of them.”
Read more: Preparing for the Later Years of Retirement
- Daniel Ruedi, RICP®
“If someone passes away and the spouse has no clue how many accounts they have – it adds another layer of stress.”
- Daniel Ruedi, RICP®
Enjoy the show?
Check out past radio shows or read more blog posts written by the Ruedi Wealth team.
*Past performance is not an indication of future results. Examples are for illustrative purposes only and should not be considered personalized investment advice. You should not make any investment decisions without first consulting your own financial advisor and conducting your own research and due diligence.