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Author: codger41 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8754  
Subject: Re: please critique my simple-minded... Date: 1/21/2011 1:52 PM
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You are smart to consider transaction costs when dealing with 2 $5000
Roth investments per year. You want to be careful with this money....it is real after tax money in hand with no employer match. Believe me it hurts to lose it.

The input you receive re how to invest the yearly Roth contributions will vary according to the advisor's interests. Because you plan to make annual contributions you might want to consider putting money into a CD ladder. Yes, current interest rates are low (online banks are only paying about 2.5% on a 5 year CD), but rates are expected to rise. If you buy a 5 year CD every year each CD will be at ever higher rates, and when your 2011 CD rolls over in 2016 you simply renew at 2016 rates. This is dollar cost averaging at its simplest.

If you want a little more action, buy into a dividend etf with 1/2 of the money each year. Just one transaction cost, lots of diversity. My favorite is SDY, the S&P 1500 dividend will follows the Dividend Aristocrats.
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