I have 00 and have just opened a Roth IRA account with scottrade. Which type should i buy ?

 

  • denaliguide2 6:56 pm on August 16, 2010

    1. One of the no-loads that Scottrade features in their NO-FEE mutual fund transaction group. Since you are in a Scottrade IRA there is no IRA fee. The Fund group I would consider is PAXWORLD. I would switch between PAXGROWTH, and PAXINCOME, depending on which way YOU thing the market is heading. PAXGROWTH does well on market uplegs, and PAXINCOME is OK during down legs. Better yet, just go cash on down legs.
    Determining market direction is the harder of these judgements.

    Good Luck

  • eers 6:56 pm on August 16, 2010

    The younger you are, the saying is that the more heavily invested you should be invested in stocks (as opposed to bonds and CDs) and vice versa.

    Whatever percentage you are investing in stocks – do a couple of things and in the long run you will do well. 1. Reduce your expenses to a minimum (check out the fund expenses) 2. Keep your stock holdings in the bigger high quality stocks if you have a choice in the short term. There is big value in these companies right now, and companies like Colgate-Palmolive, Wal Mart, etc. can only fall so far in a recession. 3. Invest some money every month into your account so you can dollar cost average and in the long run you will benefit from the short term fluctuations in the market.

    If you ever want to get away from mutual funds – read one book: The Little Book That Beats The Market. Trust me.

  • Yardbird 6:56 pm on August 16, 2010

    Consider ETFs also, since they don’t have the account minimums that many mutual funds do. I recommend that you invest in the funds with the highest dividend yields, since those dividends will be tax-protected. A Large-cap value fund or ETF like JKF would be suitable, or a real estate REIT fund or ETF, like ICF. Consider also a couple of bond ETFs with high dividends, TIP and AGG.

    Good luck!

  • Mike K 6:56 pm on August 16, 2010

    Generally speaking, the younger you are the more risky you can go (more small and mid caps). I would look for a diversified no load fund with a low expense ratio (less than 1.25%)