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Ask Money

A Financial Planner

Chris Farrell Aug 28, 2008
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Question: I am 66 years old, retired in Feb 08, and my portfolio is down by about 30% since then. I have not withdrawn from the investments. Instead, I’ve withdrawn cash from my bank savings to supplement Social Security and pension payments. The Rollover IRA (from 401K) was all in Fidelity Freedom Fund 2010 until April when I invested 20% of this into Fidelity Gold and another 20% into Fidelity Canada–all down the last time I looked. Is there a sane way now to get out of these investments and into cash or Treasury inflation protected securities (TIPS)? Or must I wait it out so I don’t mess it up further? And, yes, I am past due for making an appointment with a Certified Financial Planner (CFP).(PLEASE WITHHOLD MY NAME-CALL ME MS DIZZY) Durham, NC

Answer: Well, I would never call you Ms. Dizzy, let alone think it. In general, I like target date funds: As Lauren Young of Business Week recently put it: “These funds, which automatically adjust their asset mix as an investor’s retirement date approaches, were seen as a way for individual investors to achieve the discipline, diversity, and typically higher returns of pension funds.”

You put your money into two commodity funds. Gold has recently peaked, and come down sharply as the dollar’s value has stabilized in the international currency markets. The Canadian fund is essentially a commodity fund since the performance of energy, agriculture, metals and other commodities were behind its run-up and current down-draft. In other words, you aren’t well diversified and you are in riskier sectors of the financial markets.

I can’t give you a better suggestion than you did in your last sentence: Work with a personal financial planner. Before you start bouncing around between funds I’d spend time a financial planner you can work with, especially one with the certified financial planner (CFP) designation. The big drawback to a fee-only certified financial planner is they are expensive. It’s easy to spend $2,000 to $3,000 for a comprehensive plan. If that’s too much you could negotiate for a smaller deal that focuses primarily on your retirement portfolio.

If you search the Getting Personal site you can get some more information on how to find a financial planner.

For a quick check-up you could tap into Fidelity. (I’m assuming you’re with Fidelity since the 3 funds you mention are all Fidelity funds). It offers a free online, interactive service. There is a toll-free number to call to talk to an advisor with any follow-on questions. The service isn’t comprehensive, but it’s helpful.

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