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URL:  http://boards.fool.com/gtokay-i-gotta-ask-what-is-probably-a-stupid-11951321.aspx

Subject:  Re: Starting a Roth Date:  2/8/2000  6:44 PM
Author:  dcarper Number:  18874 of 86442

>Okay, I gotta ask what is probably a stupid question, but, hey, that's me. At least I'm consistent.

Well, I'm not sure my answer is the absolute right one (as if there were such a thing!), but since I am in the same situation as you, I'll tell you my thoughts as they apply to me.

> I just started my Roth account, for 1999. Since you are limited to $2,000, it seems you are limited on what you can do. Is
there a strategy on how to start, then when to add new stocks or buy the same stocks each year?

Q: Am I better off buying just a couple of stocks, split between the $2000 or buy more companies and less shares?

A: I think it is best to stick with just one or two stocks, maybe up to about 4 if you're following the FF, because the commisions come out of your IRA, and there is no way to replace them. Too many trades, and you can be $100+ down in no time.

Q: Is it better to buy a few shares at higher prices/share or a lot of shares of lower priced stocks?

A: It doesn't matter. 1000$ invested is $1000 invested. What's important is that it is invested in a company that will grow. Don't select your stock buys on price (unless of course you want to buy BRK.A, in which case forget it! ;) ), select based on how you think a company (that's what you're buying) will grow.

>What I did do was buy 2 stocks (Home Depot & Globix) for my '99 contribution. Now, I want to make my Year 2000
contribution. Am I better off buy more of each, then new stocks next year, or buy new ones this year?

A: Tough call. IMO, with only $2000 invested, diversication is not yet much of a worry. In a few years it will be. Right now, I would buy the best stocks you can find, regardless of whether or not you already own shares. I bought CSCO with mine; I'll probably buy more when I make my next contribution, but I'll decide when I have the money.

>That's enough questions for this post.

> I am reading TMF Investment Guide, but I'm not done yet. It's slow reading, as I take time off to consider what I have done in
the past, then I beat my head against the wall for a few minutes.

Don't hit it too hard!!! You may knock out what you've learned!

Thanks!

Mike

Your welcome. HTH
David
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