Mutual Fund Roth IRA account VS. Roth IRA?

Question

I heard someone say that a mutual fund Roth only does how well the fund is doing while the Roth compounds the interest of your contributions. Is it true?

Answer 1

No it is not true. There is no such thing as a "Mutual Fund Roth IRA." It is just a ROTH IRA in which you can invest lots of different ways including mutual funds, stocks, cds, money market funds, bonds, bond funds, blended stock/bond funds, etc. No matter whatever you invest in, your contributions, dividends, capital gains, interest earned are all added to the amount already in there and compounded, just like if it was in a "normal" or "regular" account with the exception with the ROTH, you don't pay taxes (that is all the ROTH changes) on any of the earnings if you leave them in there until you are at least 59 1/2 years old..