Make 1999 IRA contribution now and it has more time to grow


WHEN should you make your IRA contribution? "Contribute to your IRA early in the year to maximize its growth," says Moneypaper. "This advice applies to 1999 contributions, so think about it right away.

"One strategy, if you have the funds, is to 'double up' by sending $2,000 for 1998 -- if you haven't done it already -- and $2,000 for 1999. Clearly label each check by year. By sending in both years' contributions now, you get a head start."

Is your mutual fund performing badly? "As of mid-December, with the S&P; 500-stock index showing a 1998 return well above 20 percent," says Morningstar Reports, "the average stock fund was up just 7 percent for the year, and the stock fund average (including international and specialty funds) showed a return of only 5 percent."

Instead of sticking with underperforming mutual funds, consider index funds. "An index fund mechanically duplicates the S&P; 500-stock index," says Financial Perspectives, "and over time index funds have outperformed more than half of all mutual funds."

MARKET WATCH: "The same creeping deflation that we've seen in the last 18 months is still very much in force. And the stock market is on a big bubble." (Barton Biggs, Morgan Stanley Dean Witter,)

"I am still a bull. Let your winners ride and cut the losers." (Laszlo Birinyi, money manager.)

Pub Date: 1/20/99

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