My plan is to open a traditional IRA with Fidelity, buy its mutual fund (which one do you think is the best for me?). Beside, I will buy some DRIP stock of some oil company such as COP, Exxon...Is it a good plan, i don't have a lot of money ($3000), i am 21, student, currently working ? I want to be conservative, i plant to hold stocks for long period.
I read that a traditional IRA will automatic become a Roth IRA in 2010, is it correct? SO, should i open a Trad IRA or ROth IRA. Thank you
2007-02-02 02:18:43 · 3 answers · asked by think 1 in Business & Finance ➔ Personal Finance
No. Open a Roth IRA now. Converting from a traditional IRA to a Roth is a pain in the butt and not worth it and the 2010 thing is wrong. A Roth IRA is tax free when you cash it out when you retire. Very nice way to go. Also, go to Vanguard not Fidelity. Very low fees. Outstanding earnings and performance always. Open a no load fund like the Total Stock Martket Fund. The minimum investment is $3000K so you are just fine with the money you have to invest. Buying a stock fund is the best way to go for your goal and your age. This fund is also in all areas of the stock market, and invests in all the large solid companies so it isn't going to crash next week or anything. Take a look at the performance at www.vanguard.com Individual oil company stock purchases are pretty risky given your goal. Don't be too conservative though. You are young, but you want to make the most for your money now. As you get older that is when you would want to switch your investments into more conservative funds.
2007-02-02 02:36:05 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Well since you have already paid taxes on the 3K a Roth IRA is best...and would be best anyhow.
You don;t want to be conservative at 21....you have 45+ years for the money to grow. Look into an aggressive growth stock mutual fund, one with a good track record of groth (10+ years)
First I would look at you debt. Pay that off off if you have any. Otherwise it would b elike taking out a 3K student loan to buy mutual funds, or putting 3K worth of stocks on a credit card, or borrowing against a car to invest...wouldn't make sense. So make your first goal to be debt free and stay there. Then invest.
Awesome start, way to be thinking about the future....kepp on that track and best of luck
2007-02-02 10:26:32 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Uh-oh. You've done it now.
I posted the same sort of thank you at Thanksgiving and it was removed and I was assessed a 10 point penalty.
They want us nice on this site but they don't want us to show gratitude.
2007-02-02 10:28:50 · answer #3 · answered by Awesome Bill 7 · 0⤊ 0⤋