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Author: mongoose1969 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Roth IRA - ETF or Stocks? Date: 2/17/2011 7:32 PM
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Hello all!

I'm 42 and going to start a new Roth IRA. My plan is to invest the full $5000 per year. I'm trying to figure out if I should invest in stocks or specific ETF sectors. I know that Vanguard has a Dividend ETF. I know that Dan Dzombak wrote an article highlighting 10 dividend stocks. I'm just looking for some suggestions. If ETFs are the way to go, are the certain sectors that are recommended for a Roth set up?

Thanks for starting the conversation with me.

Rick
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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68477 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/17/2011 8:33 PM
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Rick the fund you refer to I believe is Vanguard Dividend Appreciation ETF VIG.
http://quote.morningstar.com/etf/f.aspx?t=VIG&region=USA...

Its certainly a decent choice.

When I went to pick some solid companies with higher than average dividend exposure to my portfolio, I chose Vanguard Consumer Staples ETF [VDC]. A little better dividend & less volatility than the market in general. Plus I think it may hold up better in tough times as the companies in the ETF are making stuff that people need on a daily, weekly, monthly basis.
http://quote.morningstar.com/ETF/f.aspx?t=VDC

'm trying to figure out if I should invest in stocks or specific ETF sectors.

Do you have time or the desire to analyze many stocks & continually monitor the ones you invest. I didn't when I worked nor wish to devote the time not that I'm retired.

Good Luck!

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Author: mongoose1969 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68479 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/17/2011 10:43 PM
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Thanks for the fast reply. Since I'm relatively new to the Fool I was wondering if you could help me with something. Is there any type of ETF screener on this site? I either haven't found it or didn't know what that I was looking at it.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68481 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/18/2011 12:44 AM
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I don't think there is one on TMF.
Here's acoupla:

http://screen.morningstar.com/etfselector/etf_screener_versi...
http://online.wsj.com/public/quotes/etf_screener.html

If those don't suit you try goggling for an ETF screener.

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Author: HumbleGenius Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68482 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/18/2011 9:33 AM
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mongoose1969
I am over 80 and have had a ROTH since they started in 1998. My ROTH has gone up and down. I wish I had the advise that is available to you on this site to the right of these messages on Retirement Investing. For $99 you can subscribe to a not so foolish retirement guide that will show you how to plug your $416.66 monthly ROTH contribution into a set of very high quality main stream and growth stocks portfolio that will by its design grow your automatic monthly (or bi-weekly) ROTH deposits. You will be surprised by how care in eliminating the middleman draw down of Mutual Fund managers and even Brokers and the nature of your periodic deposits and the automatic dividend re-investments together with tax elimination will increase the growth velocity as time goes on. Take a look at some of the examples in the sales pitch. I started some on my children and grand children on ROTH IRAs.

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68504 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/20/2011 4:01 PM
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You need to take a hard look at the expenses of buying and selling an ETF or a stock. At Vanguard a mutual might have an expense ratio of maybe 0.2% which would cost you $10 a year for your first $5,000. Paying for any stock trades would quickly increase your expenses to an unacceptable level.

If you are not sticking to just the commission free ETF's they would have the same problem.

Once you have saved up a number of years and the amounts you are working with are larger then percentagewise, the cost of a few $7 trades each year becomes more acceptable.

What to buy really depends on the rest of your holdings in any other accounts.

For now I don't see anything wrong with just using mutual funds instead of ETF's.

Greg

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68506 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/20/2011 4:20 PM
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... I am over 80 and have had a ROTH since they started in 1998. My ROTH has gone up and down. I wish I had the advise that is available to you on this site....

I was here in 1998 and back then there were recommending portfolios like the "Dogs of the Dow" and the "Foolish Four". These worked well until they didn't and they then went on to try dozens of other portfolios and newsletters, most of which have disappeared.

Be careful about thinking that anyone would sell the secrete to beating the market as a newsletter when they could become a billionaire by using this information to buy and sell stocks themselves.

Go to a used book store or a library and find an old Motley Fool book from back then read about how the "Fool" got its name. Ironically, it was basically that all the "smart" people who wrote news letters and managed mutual funds couldn't beat regularly beat an index fund so it is better to be a "Fool" than "Smart".

The last two years have been wonderful in the stock market since it bottomed out and it has been easy to lots of people to look good in a market where even the S&P 500 has just about doubled.

Greg

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68519 of 74759
Subject: Re: Roth IRA - ETF or Stocks? Date: 2/21/2011 10:48 AM
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For now I don't see anything wrong with just using mutual funds instead of ETF's.

Advantage of mutual funds - you can dollar cost average easier and many will waive minimum requirements if done monthly.

Disadvantage of mutual funds - expense fees can be higher when all added together.

Advantage of ETFs - ease of buying/selling, don't have to wait for market close.

Disadvantage of ETFs - to keep commissions down you need at least $2000 for a buy/sell transaction but some brokerages like Fidelity are offering many ETFs commission free.

JLC

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