No. of Recommendations: 2
For my Roth I don't want to invest in just one mutual fund. I wanted to use Fidelity online to start a Roth that is diversified in a few funds...

Having a few funds is a fine goal. But keep in mind that a mutual fund is already a diversified investment. And there are costs and minimum investment amounts for some mutual funds. Some may charge an extra fee for small investments. So the idea is to avoid those fees and costs, while meeting minimum investment requirements.

I'm reading the suggestion as buy one fund with this year's contribution, another fund with next years' and more after that. As long as your first couple of funds are not highly focused funds (like the fictional Third-World Large Cap Growth Environmentally-Conscious Fund), you'll have plenty of diversification from the get go.

how many is a good target - I was thinking around 3.

I could agree with that. I personally think that people who end up with a huge bundle of mutual funds have really just bought into the broad market. They might as well buy a couple of market index funds and be done with it.

--Peter
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