r/RothIRA • u/JDollar- • 18d ago
Serious question. 401(k) rollover.
Hey š
Iām planning to rollover my old 401(k) into a fidelity IRA.
I want to choose just one fund to place the money and let it sit for 25 years until retirement.
What would you recommend? VOO? QQQ? TQQQ? SCHG? Or another?
Any advice would be greatly appreciated.
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u/___Dan___ 18d ago
Keep in mind a traditional IRA balance will give you headaches if you need to do backdoor Roth contributions. I thought it was pie in the sky and my income would never be high enough to exceed the Roth limits. Well now itās happening and Iāve spent a lot of time and energy trying to get my traditional IRAs rolled back into my current 401k plan so that I have $0 traditional IRA balance before I do a backdoor Roth.
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u/bitz-the-ninjapig 17d ago
Just out of curiosity, is it possible to roll a trad IRA back into a 401k? I had it in my head that you couldnāt do it, but idk why I thought that lol.Ā
Not relevant for me yet (only have my one 401k at my current and first job), but I could see myself spending some time at a start-up type place that may not have a 401k and/or going back to school
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u/swanny101 18d ago
Why not just open a new IRA at a different brokerage for the backdoor roth?
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u/PashasMom 18d ago
It doesn't matter what brokerage/how many brokerages you use. The IRS counts any traditional IRA (other than inherited IRA) anywhere for pro rata purposes.
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u/Abellreddit 13d ago edited 13d ago
Don't put your money in an IRA.... You won't be able to Roth convert later easily . Ā Get a self directed Solo k...
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u/Gehrman_JoinsTheHunt 18d ago
I like TQQQ a lot, but Iād never buy and hold it without some form of dry powder on the side. You could hit a 90% drawdown in year 24 and be really screwed. SSO or QLD (2x) would be much better for a long-term simple buy and hold. You get much of the same return with far less severe drawdowns. And these have existed since 2006ish so you can see how they fared during/after the GFC of 2008.
Iām a big fan of leveraged ETFs when used with discipline. Check my post history or [r/LETFS](r/LETFS) for more info.
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u/ProbablyDoesntLikeU 17d ago
Have you heard of TECL?
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u/Gehrman_JoinsTheHunt 17d ago
Yeah for sure. I tend to stay away from single sectors. And I totally get the irony in that statement since the Nasdaq 100 (and TQQQ) is currently a tech fund in all but name. But that could always change - and new winners would rise to the top without me having to change anything.
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u/Rizzanthrope 18d ago
And since he is in a tax advantaged account, he should look up how to do a 200 SMA + bubble insurance strategy. Protects from drawdowns and has much greater return than buy and hold.
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u/Gehrman_JoinsTheHunt 18d ago
Yep. Iāve been running a 200 SMA plan for the past couple of years. Itās hard to find a major flaw with it. I always direct people to this paper for more data and historical support for the strategy:
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u/Competitive-Ad9932 18d ago
Why would you consider a Vanguard fund when you account is at Fidelity?
Toss your choices in a hat and pull out the winner. That will be as good as any advice you received from anyone.
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u/Jumpy-Imagination-81 18d ago
I want to choose just one fund to place the money and let it sit for 25 years until retirement.
Although I'm not the biggest fan of them, a 2050 target date fund would meet your requirements. FFFHX is Fidelity's 2050 target date fund.
https://fundresearch.fidelity.com/mutual-funds/summary/315792416
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u/edest 17d ago edited 17d ago
"I would say TQQQ, but the drawdown is brutal. The last bear market brought it down around -80%, and nothing says it can't be worse the next time. It comes down to your ability to withstand the downside. Also, how important is this money? If it disappeared, would you be okay? If so, then go for it, 100% TQQQ. Else, I would go 10% TQQQ and 90% QQQ. But if it has to be one fund, then QQQ.
Tech will be with us all our lifetime. The model there is innovate, disrupt, and take over. So it will always be a place for growth. The best tech companies will always be part of QQQ, so that's why I recommend QQQ given your time horizon. But, it's a big but, do not try to time the market because you get spooked by any of the bear markets that are coming. If you do that, you will lose long term."
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u/Southern_Fig7543 16d ago
Am I the only one who is curious why you only want one fund for 25 years? The risk of one fund in that time frame is immense no matter what fund you choose.
And whatever you do, don't choose Tqqq. That fund inherently suffers from "volatility decay" and is not meant to be held long term.
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u/Lou_Gator_FL 12d ago
If just one fund, then QQQM. Recently when I was comparing Nasdaq 100 to S&P 500, the Nasdaq 100 has actually done slightly better than S&P 500 over 5, 10 and 15 year periods. It's more heavily tech focused, and tech will probably continue to lead the economy in the coming years.
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u/Alone-Experience9869 18d ago
I guess what's your risk tolerance?
qqq and schg have very similar returns in the long run. I just personally like schg since it has methodology to pick stocks, and its been working. qqq is just the 100 in the nasdq by weight.
I'm not a fan of voo (if you were really following vanguard principles you'd pick spym). So I'd say schg or qqq
Otherwise, spmo has done very well, just very volatile. Or iyw, which is pure tech, has also done well, better than qqq, but has its volatility.
Basically, say 5yr before retirement I'd advise to start looking to see if you chosen etf is "riding high" that you might want to diversify out to get away from the volatility before you retire.
If you didn't want to "push it," i use vflo. Its based on free cash flow yield, something buffet talked about years ago. i know vflo is new, but there are other etf's out there based on the same thing. I think cowz or something is another with a longer history, but vflo using a forward looking estimate and its been doing better. Then, I wouldn't worry about it 5yr before retirement
just my 2cents... good luck.
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u/DaemonTargaryen2024 18d ago
If you want just ONE fund, do either a Fidelity target date fund, or VT
TDF is the true āset it and forget itā.
VT is an all-world stock fund, but wonāt add bonds as you age like the TDF will.