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URL:  http://boards.fool.com/greetings-i-was-kind-of-thinking-of-starting-with-23644191.aspx

Subject:  Re: Starting a Roth IRA Date:  2/1/2006  4:09 PM
Author:  jbking Number:  49622 of 76387

Greetings,

I was kind of thinking of starting with index funds but that's just my default. I'm better at the savings side than figuring out where to invest.

Just to show some depth to the rabbit hole here, let's take index funds and then ask which school of index fund investing would you want to be in:

1) Total Stock Markets only. In this school those Total Market funds, whether they be US markets, foreign stocks or US bonds, give adequate diversification to that asset class and are so your portfolio only needs 3 funds max.

2) Armchair Milionaire. Here you have large-caps, small-caps and foreign stocks are the three areas you'd invest in and so is a bit finer division of things.

3) Slice & Dice. So now we split things a bit more so that each of the 3 in the Armchair now have a value tilted part so that you have 6 funds in theory.

4) Coffeehouse portfolio. Now let's add in REITs and maybe the odd sector fund into the portfolio.

Or maybe you want to step back and select a different route. I would highly suggest reading up on a few approaches and figuring out which makes sense to you and which ones do you have the time commitment for as some investing strategies are more work in terms of time than others.

Regards,
JB
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