Hi all,
Background: I have controlled my parents retirement accounts from inception. Without me, they would have kept their savings in the bank forever. I made them start a 401(k), IRA, Roth IRA. My dad gets a pension, they both get social security and they have rental income. Their house is almost paid off and they have no major bills. They do not need their retirement savings to live as they are making more passive income per month than they need. Neither of them work.
That all being said, I had played with some money of theirs 7-10 years ago and put it in various stocks. I have sold off some, but what's left is Boeing (BA - bought at $75, now at $290 and worth $14k) and Goldman Sachs (GS - bought at $138, now at $253 and worth $5k). I'm torn on whether to sell and put all the cash into Vanguard's VFORX which has been performing at 19% this year.
Basically, their retirement fund is a savings account for my sister and me. Any thoughts?
Thank you!
I would caution you to stop thinking of this as your inheritance and stop "playing around" with their money. Until such time as they die or otherwise give the accounts to you, it is not your money. Announcing that your parents' money/items are yours and therefore you're treating it like a gambling fund comes across as hubris.
This situation might mean you could go more aggressive than other portfolios for their age group since they aren't dependent on every single penny, but you definitely need to take a few steps (leaps) backwards regarding how you're thinking of and treating their investments.
Despite your parents being comfortable right now and likely not needing to count on that money being available for them, none of you truly know what the future will bring. And your speculating and dancing in and out of stocks - pure market timing - is dangerous. Not just for them, but for you as well. You're getting over-confident in choosing stocks, making terribly risky moves - in your own words "playing."
They are trusting you to be smart with their money. You should be feeling a great weight of responsibility and do careful research and invest wisely for them in the hopes that they if they ever need that money, it will be there for them. And throughout your custodianship of the accounts, you should be learning to invest wisely not just for them, but for your own future and your sibling's future.
Luck is not the same thing as knowledge. Confusing the two could be disastrous for all involved.