No. of Recommendations: 0
If this is money for retirement (and, in an individual RETIREMENT account, it is), and you're not *incredibly* risk adverse, there is absolutely NO reason to put it in CDs. You have 30, 40 years to let this money grow - well, depending on your age - there's no reason to play it safe to avoid shorter term loses.

Keep asking questions, the only stupid question is the one not asked. Well... I guessed some asked questions could be stupid too, but then you still learn!

Take your time deciding where, and remember you can have mulitple ones. You can move money between them (although you have to be careful about not creating a taxable event there), and you can close them if you move all the money out, so you're not committed to anything.

I could be wrong (I have been before), but most Vanguard funds have a $5K minimum to avoid fees in IRAs ($10K in a taxable account). And I can't find anything about a Vanguard IRA account fee. So if you have $5K to put in, you won't be charged fees (other than the expense ratio, of course).

But, you say, the IRA limit is only $4K. Ah, yes, that is correct, but you can contribute your 2005 contribution until April 15, 2006. So, wait until Jan 1, and then put in $4K for 2005 and $4K for 2006 and you can pick a fund of your chosing and avoid all fees (or $1K for 2006 if you can't afford the full amount yet). This'll also give you plenty of chance to make up your mind.

Finally, when starting out, it may be best to go with funds. Vanguard is an excellent choice, and Fidelity has a decent range of funds plus no-transaction-fee funds of other companies. Fidelity would let you then do stock later, but you might rather open up a cheaper one with a discount broker anyweay. Make a decision, you're not committed, and put enough in to avoid the fees, and you're golden.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement