I have my Roth opened and have automatic deposits put in every month. I want to begin investing in some diversified mutual funds. Can I start now or do I have to wait until I have the $4,000 saved? How can I make my Roth GROW?!?!
2006-11-10 03:45:01 · 5 answers · asked by Anonymous in Business & Finance ➔ Investing
Ask the company that you opened the IRA with about depositing some of the amounts into diversified mutual funds. Covering your bases with Growth, Value, and International/Global funds, and Large-, Medium-, and Small-Cap funds will allow you to diversify.
Some accounts have minimum opening balances ($500-$2,000, generally), so you may have to wait until your current balance is sufficient for diversifying. Maybe you can invest in new funds with less than the required minimum, though, because you are investing a portion of your income every month.
The best thing you can do to make the IRA grow is to keep investing. Whether the market goes up or down, invest the same amount every month and let the dollar cost averaging help you. This works because as the market goes up, prices get more expensive, and you buy fewer shares. But when the market is down, prices are cheaper, and you buy more shares at a low price.
So just make sure you keep investing, and don't be scared off by changes in the market. Your Roth IRA is going to be there for retirement, so let it do its work until then.
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2006-11-10 04:08:56 · answer #1 · answered by Anonymous · 0⤊ 0⤋
No, you do not have to wait. However, many mutual funds do have a minimum initial investment requirement. Some $2,500 or more. You do not want to put all of you Roth money into just one mutual fund either. It would be a safer strategy to pick several with different investment objectives. Start with one but branch out as you accumulate more money in the account. You did not say who was the custodian of your account. That makes a difference on what strategies are available to you. If the account is with a stock broker, then you have a very wide variety of options, including index funds and closed end funds that are traded like stocks. You could actually purchase say just $500 or $1000 of several different index and closed end funds.
2006-11-10 06:32:49 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Try to avoid funds like Putnam which have high commissions.
Stick to low fee & no-loads. Read a couple of good books on investing and retirement investing. Learn about "asset allocation". watch out for specific suggestions on a forum like Yahoo Answers...... it can be a big mistake.
BTW: Congratulations! Doing a ROTH IRA is a great way to save for the future!
2006-11-10 15:12:37 · answer #3 · answered by Common Sense 7 · 0⤊ 1⤋
No minimum at Putnam and one of the best diversified funds in the business (according to Lipper), PAEAX. You don't necessarily have to pay any up front sales charges, and all funds have operating expenses below their Lipper average. Just like anything else in life, you get what you pay for. If you want an actively-managed fund that is consistantly beating the market and its peers, Asset Allocation - Growth at Putnam.
2006-11-10 11:34:22 · answer #4 · answered by 12 November 3 · 0⤊ 0⤋
It depends on the company you opened it with. Most require a minimum amount (i.e $2k) per fund, but they might waive that requirement since you have setup automatic deposits. Keep investing every month and it will grow!
What is the money going into now?
2006-11-10 03:51:57 · answer #5 · answered by CPAKeith 3 · 0⤊ 0⤋