I need IRA help?

Question

I am about to open my first ever Roth IRA account, and I know the general concept of how it works, but I need clarification on a couple of things.

I will most likely do this through TDAmeritrade. Once I open an account and deposit $4,000 in it, can I buy anything??
Mutual Funds, ETFs, and Stocks? Also can I trade within my account? For example, if I buy an ETF today and it goes up 10% in the next month, can I just sell it?

Do I need to invest all $4,000 or can I just let some of that money sit there for a little while?

Please help, thanks to all!

Answer 1

Yes, you should be able to "buy anything" with your IRA account ( I do...with E-trade and Fidelity)
...and yes, some money can sit in your "core account" and not be invested..( should gain tiny interest while it's sitting there)
...and yes, you can buy and sell stocks and ETF's frequently.( but every time you do, you will pay a commission -approx $ 10.) Mutual funds, however do require you to hold for 3 or 6 months usually. ( NO problem...you're going to pick a good one anyway!)
So, jump in and have good luck...
I would sort of suggest that you put at least 75% or 80% of your money into a good solid mutual fund and "play" or" trade' with what's left 'til you really get the "hang of it"....
There's a magazine out on the shelves this month by " Kiplinger's"...a whole lot of info on the mutual fund portion of your investment...I think it touchs on ETF's, too.
Again, good luck...and good investing ( catch the Fast Money boys on CNBC at night...usually some astute info)

Answer 2

Yes, to all of the above! You can hold any investment vehicle in an IRA (cash, bonds, stock, ETFs, mutual funds, etc.). However, you may technically need two different IRAs if you want to trade stocks and hold mutual funds, for instance. One will be a brokerage account (but still an IRA) where you can hold cash or stocks/ETFs, and one will be a mutual fund account where you can hold any fund (including a bond fund, index fund, or money market account). You can technically open as many IRAs as you want, but you can only contribute a combined $5000 in them this year.

If you like to trade stocks/ETFs, an IRA can be a good place to do it because you don't pay tax on the earnings. But of course the best thing to do is buy a low cost index fund (or collection of index funds) and let it sit for 30 years or so. You will almost certainly come out ahead that way, even if you are a good stock/ETF picker.

Answer 3

This is how a Roth IRA works:
1) You open an account
2) You pick investments to fund that IRA account
3) Then you put your money in these investments.
4) Gains, dividends, and interests in the account grows tax-deferred!

IRA are personal retirement plans. The government puts a 10% tax on anyone who withdraws money from it under the age 59 1/2. The government has allowed some exceptions to that rule such as using up to $10,000 to purchase your first home or paying off educational expense.

You do not not have to invest $4000 every year. Though it is wise to do so, if money is tight, then you don't have to. You can even just let it sit there for awhile until you are ready to invest again. What I suggest is invest systematically. That mean you invest the same amount every month. If maximum contribution is $4000, then the maximum you can put in each month is $333.33. Next year it will be $5000. If you understand dollar cost averaging, you would understand that investing systematically lowers the cost per share.

The best thing about Roth IRAs is that it grows tax-deferred and withdrawals after age 59 1/2 are tax free.

Answer 4

The most important thing is to actually open the Roth and make your 2006 contribution(s) prior to April 15th, 2007. You do not need to contribute the entire $4k at once. When the funds are contributed to your Roth account the funds will sit in a cash account and can be allocated at any time in the future into mutual funds, stocks, bonds, ETFs etc.....while it's important to allocate the funds within a reasonable period of time, it's much more important that you allocate it appropriate and make the right decisions so don't feel pressured into investing it from the cash account until you have a well thought out investment strategy. You can trade within the account without tax implications as long as you do not take any distributions out of the Roth account but I would encourage you to make longer term investment decisions and avoid actively trading within the account unless you are one of the few investors who can consistently predict market and asset value movements in the short term.

Answer 5

You may buy any investment instrument that your IRA provider offers for the type of IRA that you open.

You can just let it sit as cash and it will earn a small interest rate like a savings account.

I am not familiar with ETFs myself, but with some mutual funds you have to hold them for at least 1 year or pay a premature sale penalty. Because this is a Roth IRA, you don't have to worry about short term capital gains taxes, or any taxes for that matter, unless you take a distribution.

Answer 6

in the beginning a thumbs as much as ello guvna. at the same time as i will understand what you assert and the context that that's in. I understand why the IRA got here approximately and why there is such resentment against the British. even nevertheless at which element do you end prepare this template? The 1916 insurrection, the Tan conflict?, The pass border marketing campaign interior the 1950's, The mainland bombing marketing campaign for the duration of the 70's & eighty's? at the same time as the thought of freedom opponents status up against John Bull and the British Empire is all ok. One mans freedom fighter is yet another mans terrorist? i might desire to truly ask you the question. often do the British help the IRA? i be attentive to they bombed and killed civilians in Warrington & manchester and in Hyde park (to call yet some) will we understand what they did? i think of the respond could be no, simply by fact the folk who lost kin over the modern-day issues are not focused on what got here approximately 2 hundred years in the past, they're worried that they lost their kin

Answer 7

Can buy all those things - yes. Can buy & sell - yes. Can let it sit but as anything can be bought via etf now (commodities DBA+DBP,currencies DBV ,etc) no reason to. Diversification cuts risk.