Roth Ira

[Kramerica]

Saltman, the good thing is you've started off correctly by setting up a Roth as opposed to traditional IRA. Might as well pay the taxes now when you know what they're going to be instead of some unknown amount later.

The best thing for a beginning investor (or, one could argue any investor) is to keep it simple, keep it diverse, and stay on course for your goals. I'm assuming you're a twenty or thirty something, meaning you've got at least 30 years before you'll be able to start withdrawing money, so you're able to take on a lot more risk than an older investor. Instead of choosing different sectors and diversifying on your own, I'd recommend a mutual fund that does all the work for you.

If your Roth is through Vanguard, I would recommend one of their Target Retirement funds. You can choose your planned retirement timeline, and the fund will be allocated (between stocks, bonds, and cash) based on your age, then will adjust over time based on your your age (and, similarly your risk tolerance). Vanguard also offers the lowest cost mutual funds so your money grows more over time. See this link:

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList

As you can tell I think highly of Vanguard but if your IRA is through someone else you can find a comparable mutual fund there. Another good thing to do with IRAs is set up an automatic investment plan to go into your account. Kind of like how your employer takes out a percentage each period towards your 401k, I would recommend a monthly amount coming out of your bank to your IRA. It's a great way to contribute without really thinking about it, just think of it as another bill. I'll pay off in the long run. Hope this helps.

[holderoftruth]

I would stay away from the stock market for now, my opinion.

[Kramerica]

I would stay away from the stock market for now, my opinion.

I hope you don't mean because the market has been down, which is actually the best time to buy in.

[Happy Panther]

I would stay away from the stock market for now, my opinion.

Why?

[holderoftruth]

I hope you don't mean because the market has been down, which is actually the best time to buy in.

No, I mean because its about to crash and you will lose a lot of money.

Just my opinion though

[Happy Panther]

No, I mean because its about to crash

Why?

[holderoftruth]

Why?

Whats the driving factor that controls the Economy? People spending money.

Everyone person goes through a spending pattern through their life. During your early 40s will be the time when you are spending the most money (pumping money in the economy). Once you hit your late 40s early 50s your spending drastically drops, your kids are older and moving out, no need to buy a new house, etc.

What does spending patterns have to do with the economy?? By looking at age demographics with spending patterns you can determine when the economy will be taking in the most money. When 1/4 of Americans got old and slowed their spending, the economy slowed as well (baby boomers & late 2000s). The economy will continue to sputter throughout the next several years until Generation Y grows up and starts spending.

Just my opinion,

;)

[Happy Panther]

OK at least you had a theory

[The Graduate]

that was the plan. Just wanted to see if anybody had anything informative to say.

obviously not ;)

Hey Salty,

You indicated you have a Roth account which would imply you have already been to a financial institution.

Don't need to know the dollar amount but it would be interesting to know what they suggested you put your money into.

A very important point to keep in mind is that financial intstitutions are in a conflict of interest when it come to financial advice. What may be good for them may not be good for you.

Remember Ronald Reagan....Trust but verify...Best advice ever for anyone investing in financial markets.

Investing in Mutual Funds or Exchange Traded Funds is not complicated but you should have a working knowledge in the different asset categories. There are many books on investing in these type of funds in book stores and in libraries.

There is no rush for you especially at this point in time. Interest rates pretty well have no where to go up eventually and the long term trend for certain equities is most likely down. Cash is a good place to be right now for somebody that is just starting out and you can slowly work your way into other asset categories. Dollar cost averaging is a good concept that works over the long run.

Happy Panther mention ETF's and Vanguard....Good choices. Both are index funds but Vanguard is a mutual fund sold through authorized dealers and ETF's are sold through brokers. The initial investment amount is larger for ETFs but have lower management fees.

You can trust me, I'm a Buc fan. :biggrin5:

[liljah8303]

you should read robert kiosakis book rich dad poor dad, and his other book unfair advantage. the worst thing you can do is put your money in someone else's hands, a financial advisor or mutual funds or roth ira. if you are going to invest, invest in your financial education. figure out the difference between assets and liabilities. find out what a diversified portfolio really is. I'm not saying you shouldnt invest in the market or mutual funds , but you should invest in businesses, real estate, paper assets, and commodities. That's a diversified portfolio. cash flow over capital gains is king.

[pstall]

stay in cash for a bit salt. do not do target funds or etfs. sneaky fees. if you get an advisor go with one a friend refers you to.

as for the crash part. here is why i think it might be ready to implode.

a crash is always imminent. you have Greece folding, the euro sucking, the us sucking housing sucking which makes banks suck and don't let ANYONE talk you into buying bank stocks right now. purely a speculative bet right now.

and the circuit breaker limits have recently changed for the market. don't worry about figuring that one out. just trust me.

[pstall]

some other things to keep in mind on the ROTH. You ALWAYS have access to your principal. meaning, the funds you put in, you can take out the exact amount in a given tax year.

say you put in 1k. it grows to 1200. you can take out the 1k w/o penalty. anything over what you put in you get dinged.

i know you are just getting your feet wet. 2 things. first, read this book- http://www.amazon.com/Street-Journal-Guide-Understanding-Investing/dp/0684869020

I always highly suggest this book. Great simple overview of all things investing. The more you know the more you can make.

The other part for the ROTH is down the road when you get more savvy, I love writing covered calls in a ROTH. A, nice strategy to begin with and B, that accesss to principal I talked about.

But baby steps at the moment.

good luck

[Davidson Deac II]

Whats the driving factor that controls the Economy? People spending money.

Everyone person goes through a spending pattern through their life. During your early 40s will be the time when you are spending the most money (pumping money in the economy). Once you hit your late 40s early 50s your spending drastically drops, your kids are older and moving out, no need to buy a new house, etc.

What does spending patterns have to do with the economy?? By looking at age demographics with spending patterns you can determine when the economy will be taking in the most money. When 1/4 of Americans got old and slowed their spending, the economy slowed as well (baby boomers & late 2000s). The economy will continue to sputter throughout the next several years until Generation Y grows up and starts spending.

Just my opinion,

;)

Thats all true, but its already crashed and lost a 1/3 or so of its value since 2006 or 2007. The question is, is it at the bottom right now? IMO, it probably is at or close to the bottom. So if you are young, and willing to wait 20 years, now seems like a good time to get in.

[pstall]

deac its about to be much worse than 08. sorry man