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Author: Garp15 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Starting a Roth Date: 2/8/2000 5:53 PM
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Okay, I gotta ask what is probably a stupid question, but, hey, that's me. At least I'm consistent.

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?

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

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?

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.

Thanks!

Mike

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Author: dcarper Big gold star, 5000 posts 10+ Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18874 of 76079
Subject: Re: Starting a Roth Date: 2/8/2000 6:44 PM
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>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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Author: jeffy3 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18879 of 76079
Subject: Re: Starting a Roth Date: 2/8/2000 9:01 PM
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I would suggest that you Index until you finish that book and go to Fool School. Try the Index message board after Fool School.
The fact that you are asking other people whether you should buy more of those stocks make me wonder what analysis you did when you originally bought them. You literally have all your eggs in two baskets. IMHO, irrespective of the companies you choose, having all your money in two stocks is not a good investment strategy. While you could "hit a home run" and have astronomical returns, the downside is severe.

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

>>>It doesn't matter.

Good luck.

jeffy3

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