Hello, I am 29 year old self employed programmer working from home in the US. If I were to get a Roth IRA with mutual funds, do I have to constantly monitor and buy/sell stocks within the IRA? I used to trade stocks and used to freak out when the stock tanked in one day, so I told myself I will not get involved in that.
I am thinking that a financial advisor can pick a few good mutual funds for me and all I have to do is send a certain amount of money to it per month and when I am 55 1/2 years old I can begin withdrawing. Please let me know how this works and thanks.
Additional Information - Stock Market Game- What are the best stocks to invest in? I am taking an Economics class in high school and we are playing a stock market game. We have 2 weeks (until March 10th) to buy and sell stocks. We are given ,000 initially and need to make more profit than any other group. What are the best stocks to......
- NEW AGE : Law Of Attraction: Long Term Creating? What kind of thoughts do you envision for the future? Me, I like to envision a world where the currency we trade in the future is that of gratitude rather than that of money. How about you? Cleaner earth? Sane/Honest Governments? There are many good ones. Have a great day......
- Powerball AU 9million Nice first prize, not so easy to predict result, with sum totals and ANY filters not showing much clear direction. Look for a predominance of small numbers possibly, with a couple coming from way back in the draws. Numbers running HOT: 1 5 12 29 39 40 42 44 Numbers......
- Weight Tracking (Last Attempt) Total Weight Lost: 58lbs Here is my weight tracking page... It will evolve as I get more accustomed to my new lifestyle, but for starters if you want to know about the Jumpstart Medicine weight loss program that I am following read this post WeightLadder Reset — 390lbs and Starting......
3 Comments on “Simple ROTH IRA question?”
Gremmie 14th March 2010
The expenses at mutual funds can eat away greatly at your profits. Exchange Traded Funds hold many benefits over mutual funds. Besides, with all the mutual funds out there today, how do you know who to trust? My other belief is that by adjusting just a little bit, you can greatly increase your overall return.
Here is what I do with my long term trading account. It is a very simple concept. Look at a chart of the S&P 500 – most places the ticker symbol is SPX. Make it a weekly chart – meaning each unit (bar, candle, etc.) of time is one week. Then put a 50 week exponential moving average on the chart. This setup has an uncanny ability to direct the S&P 500. Since you can’t buy SPX, you can use SPY as an alternative. When the price is above the moving average, you buy the stock. When the price gets below the line and continues moving down, you sell it. This was an easy way to be out of the market during 2000-2003 and again at the beginning of 2008.
I am not a stockbroker or licensed in anyway. Just someone fed up with the system and decided to do a little research. Your mileage may vary.
msc 14th March 2010
You can buy a few good mutual funds and you won’t have to monitor your account on a daily or weekly basis, but just monthly. You should also ask your advisor what would be a good mix of stock mutual funds versus bond mutual funds for you.
Oh, I just remembered though, I think you have to have W2 income in order to contribute to a Roth. You’ll have to check the requirements. Although the tax advantages of an IRA add up greatly over time, if you have a large income you might be better off with a regular brokerage account, because it won’t have any contribution limits, and you can borrow from it more easily in an emergency.
muncie birder 14th March 2010
You can indeed do what you are suggesting. BUT the trick is finding a financial adviser that is capable of picking a few good mutual funds for you. There is a mutual fund company that sells mutual funds through advisers that does have some of the very best mutual funds. It is American Funds. Every one of their mutual funds has beaten the S&P 500 over the past 5 years–every one. In order to find a good adviser, I think that you have to know in advance what constitutes a good mix of mutual funds and then ask the adviser what funds he/she would recommend as an appropriate mix and why. By knowing the answer in advance you can separate the wheat from the chaff. And there is a lot of chaff out there.
Depending on the amount of money you are making currently, you might wish to consider a SEP IRA account for part of your investments. Contributions to them are tax deductible and there is no $5000 limit. The limit is higher. When I was in your position I had a SEP IRA account. Now that I am retired and no longer in the 35% tax bracket I am slowly moving my SEP money into a Roth. Just enough each year to keep me under the 15% bracket. There is one fly in this ointment though. No one knows what the tax brackets might be in the future. There is a possibility that they might be much higher than today. They also could be much lower if the U S were to institute a national sales tax. It pays to hedge ones bets.