Are mutual funds a good way to build a roth IRA?

Question

I am investing in a roth IRA through a large growth mutual fund now. I am young and still have a few decades before I retire. Is this a good way to get things started?

Answer 1

It is a good selection for about 25% of your assets. The other 75% should be in mutual funds with different objectives, such as developing markets 10%, foreign developed markets 20%, small cap 15%, mid cap 15%, value funds the rest.

Answer 2

Yes, you're on the right track...but like someone else said you might want to get into more than one fund..( if this is your first IRA and you're young, you may not have enough capital to get into more than one...some minimums being at $2500) But as soon as you have enough to " spread it around"...try at least some foreign market funds or emerging market funds ( that's where all the "growth" has been lately)
If you want to do some reading go to yahoo/finance, or msn/moneycentral, and look into ETF's.... you can buy small amounts and maybe able to " diversify" that way for awhile....if your one major fund has used up too much of your investment to buy a second fund.
At any rate, get into watching your investment and moving it in nine or fifteen months......don't just let it sit there and make 6%-8% . Something in the neighborhood of 13%-16%-on up....then you will really have something at 60 !
Best of luck!

Answer 3

Yes.

You might want to build a nice diversified portfolio by putting each year's contribution into a new mutual fund over the next few years.

Answer 4

yes, but don't put all your eggs in one basket. check out x-ray portfolio analyzer at www.morningstar.com. It's good to have some aggressive and some blend (aggressive/value) funds to balance you out. if you have 20+ years before you retire you can handle the ups and downs of an aggressive fund.

Answer 5

It is.

Answer 6

sure