Mutual Funds

1. Questioner: lee
   
   Question: I know if someone has a traditional IRA (e.g. mutual fund), after age 59 1/2 they can receive distributions without penalty. But what if they purchase an IRA AFTER this age? Can they take distributions starting right away if they wanted, without penalty? Then they would have not only that option, but also the advantage of tax deferred earnings. I must be missing something because if that's the case, why wouldn't everyone over 59 1/2 purchase only IRA mutual funds vs non-IRA ones? Thanks View Answer
   
   
2. Questioner: Michael
   
   Question: I’m about to invest in bond funds but I have some questions first: (1) if the Fed increases interest rates, how much will my principle lose in value per interest rate increase (e.g., typically lose 2% of principle in a bond fund per Fed’s 25 basis point increase), (2) with Fed interest rate at 0, if I buy a bond fund now, am I guaranteed to lose principle when I sell later after interest rates are raised by the Fed (e.g., I should wait until after Fed raises interest rates before buying a bond fund). Thanks for your help. View Answer
   
   
3. Questioner: RL
   
   Question: am currently 31 years old and have a vanguard ROTH IRA Target Retirement 2030 fund in addition to my company's 401K. I am strongly considering soon buying another Target retirement fund from T. Rowe Price in order to diversify my portfolio even more. In your opinion, does that sound like a smart move or is there another fund that would be a better pick? View Answer

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