Should we keep our stock, Roth and traditional?

This is a very difficult question to answer. I too have taken a bath on my investments both within my IRA accounts and without. The only hope, I believe, is to continue the course you are on. Annuities are not such a great idea. If they are variable, they are just like your IRA. If they are fixed, the interest rate is not going to keep up with inflation. If you are like most of us, you have most likely suffered a drop of about 30% to 40% in the past year, but over the 4 year period only about 15% perhaps. You can recover all of that 15% loss in only 1 year with a little luck and by continuing contributions to the IRAs. But to recover the entire 40% drop will take time, probably at least 5 years and more likely perhaps 10 years. But by continuing the contributions and sticking with investments in good companies you might be able to get back to where you were prior to the collapse in 5 to 7 years.

Remember too that if you remove your money from your IRA accounts you will suffer even a greater loss due to taxes and the 10% penalty at least for the traditional IRA, not for the Roth.

Cute dog and cute gal too.

Ooooh Boy.

You must first start by educating yourself on Retirement accounts.

1. A ROTH or Traditional IRA are both investment accounts.

A Roth is after tax contributions that grow TAX FREE.

A Traditional IRA is pre tax contributions that grow TAX DEFERRED.

2. Stocks, Mutual Funds, Bonds, Options, CD's, etc.

These are all investment vehicles. You should be properly diversified, or have proper asset allocation when looking at ALL investment accounts. Include any 401k, taxable, etc (ACCOUNTS) into the fold when investing.

It doesn't make much sense to have 100 shares of coke (for example), in 5 different accounts. If you are doing this, then you are diluting your investment dollars.

In addition, you cannot PROPERLY diversify a stock portfolio if you have less than $250,000 in stocks. So, it makes most sense to start with mutual funds, within your accounts. 401k's use mutual funds as well, so you must do the research to make sure that you don't own all large cap growth.

*As you can see from the chart below. If you owned 100% Large Cap growth mutual funds or stocks in 2006 (S&P/Citi 500 growth) you would have experienced a 20.81% "paper" gain. However, keep in mind. If you hadn't sold any of it. You wouldn't have a REALIZED GAIN. To achieve this you must sell, or take some profits off the table.

However, if you would have had the same holdings for 2007. You would have had a vastly under-performing portfolio.

Now to answer your question about the Annuity.

1. An annuity is considered a "Retirement Vehicle" similar to your Traditional IRA.

* Example:

Think of your skin as the "Investment vehicle" and a sweater as an "Account" (Traditional IRA, ROTH IRA, etc.) for which to place your skin "investment" into.

Would it make sense to put on two sweaters? or 2 Jackets?

2. Financial Advisors love to pitch this product. Simply, because there commission's are EXCELLENT for this particular type of product. In addition, there isn't much work involved for the Financial Advisor. They place your monies into the Annuity, and receive an initial commission. Not to mention. That each year they are paid a trail, which is considered an annual management fee (for not managing anything). Within the Annuity is what are called "sub accounts". These are similar to mutual funds, but cannot be called mutual funds when placed in an "INSURANCE" product.

The fees for these "Sub-Accounts" are usually 5-10 times greater than actually owning the mutual fund by itself.

Lastly, if you are invested in the market but have 10-15 years before needing the monies. Then it's best to revisit your investment strategy, but keep them within the market.

If you don't have that much time available. Then yea, pull back on the risk. Go with something that has less exposure.

Whatever you choose. I wouldn't place ROTH or Traditional IRA monies into an ANNUITY. In fact, if this financial advisor would get audited or have the SEC look at his "recommendation". He could potentially lose his licensing. This is a HUGE no no in the financial planning world.

Maybe consider firing the guy that you are speaking with. Cause if this was his/her suggestion. They obviously have no idea what they are talking about.

Just my two cents.

The biggest variable here is your age. If you're years from retirement, don't worry about your "losses". It hurts to see, but you haven't "lost" anything yet - you weren't planning to use the money anytime soon anyway. You're just watching the effects of a recession on your portfolio - just like the rest of us. Recessions do end! Hopefully the government won't do too much to prevent it from happening, but that's a different subject. Keep investing as much as you can for your retirement - you'll be buying while stocks are low. It's hard to do in times like this, but remember "Buy low, Sell high" - as you can see it's hard to do in times like this, it's also hard to sell high when the market is rising, you hold on hoping to get more. If you transfer out now you will lock in your loss and reinvest the funds with a lot less growth potential over the long run.

As you age and get closer to retirement, it's not good management to keep your nest egg in the riskiest assets. Since you'll be selling your IRAs for income at that time, you'll want less exposure to these swings in the market.

Research "Asset Allocation", it will give you an idea of how to structure your portfolio as you age. Rule of thumb (but not appropriate for all investors) Subtract your age from 100 - that is the percentage of your savings that should be invested in stocks. The rest in bonds.

You might be more comfortable selling what you have in the IRA now and reinvesting in a Targeted Retirement fund. Don't take the money out of the IRA just change the investments within it. With these the managers of the funds will reallocate the investments as you approach retirement age. There are several no-load mutual funds out there that would meet your need.

don't sell your stock anymore, keep it and be patient. Proof shows that the economy increases at a 12% rate.

If you sell now, it's like selling your house at a lowered price from what you originally bought it. There's no profit, so it doesn't make sense on why you invested in the first place.

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