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Some shifting needed as portfolio plummets

Q: My husband and I have retirement accounts with an investment company and we are concerned about the market. The total value of one account, 16 months ago, was $284,000. That account has dropped to $239,000. The second account, 16 months ago, was $235,000. Currently, it is about $185,000. My broker said we should stay put. I am 65 years old. My husband is 72. What would be the best way to handle our funds?

Name withheld, Putney, Vt.

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A: "Start with the big picture," says Tim Schlindwein, a mutual-fund expert who heads up Schlindwein Associates in Chicago. "If you feel you do not have too much in stocks, then recheck your allocations."

We have seen your accounts, he notes, and 55 percent of your portfolio is in stocks. "You are currently heavily into growth stocks. You may need to own some value stocks, unless they are in your balanced funds," Mr. Schlindwein says.

You might also consider shifting some money "to another fund company, since all your accounts appear to be with one [broker-directed] fund provider that offers relatively low returns," he adds.

Assuming your accounts are tax-sheltered, there should only be transaction charges for making a direct transfer. (If your accounts are not sheltered, there could be tax consequences.) But "do what is necessary to protect your assets, even if it costs you a little money in the short run," Schlindwein says.

Q: I have about $300,000 in stocks with a large brokerage. Each time I buy or sell, I am charged $100 plus. Is it possible to transfer my stocks to an online brokerage? I have attempted to get this information from my broker without success.

C.J., Walnut Creek, Calif.

A: "You can definitely transfer the account," according to a spokesman with Ameritrade, an online brokerage firm where trades can start as low as $8.

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Contact an online broker and open a new account. You will fill out papers on your current brokerage accounts. The online broker will then do the actual exchange work for you.

You will, of course, "have to pay any transfer fees," both to the online broker, and to your current broker, the Ameritrade representative says.

Questions about finances? Write: Guy Halverson, The Christian Science Monitor, 500 Fifth Ave., Suite 1845, New York, NY 10110 , E-mail: halversong@csps.com

(c) Copyright 2001. The Christian Science Monitor


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