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Newbie here... I have a roll-over coming (in 2 weeks)from a former employer and need to open an IRA account. (I know I have 60 days to invest it w/o penalties.)

1. Can I open an IRA account that is self-directed?
2. That allows me to trade and have a cash/MM account to work from also?
3. I think I want to invest in the FF. But I saw a few posts that questioned the foolishness of investing in the FF with an account over 15K. My roll-over will be several times that.
4. Been watching the discount brokers board, but anyone have suggestions for a discount broker for IRAs on this board?
5. Any advice from Fools would be appreciated.

Thanks!
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slofool98 asks:
>
>Newbie here... I have a roll-over coming (in 2 weeks)
>from a former employer and need to open an IRA
>account. (I know I have 60 days to invest it w/o
>penalties.)

One big bit of advice right off the bat: Make sure the rollover is a direct institution-to-institution rollover, *not* a check made out to you! You'll save a lot of headaches.

If your old employer wants you to take the money *NOW*, and you haven't made up your mind about where to park it, just roll it over to a bank's money-market IRA and leave it there while you look.

>1. Can I open an IRA account that is self-directed?
>2. That allows me to trade and have a cash/MM account
> to work from also?

Yes and yes! Just about all discount brokers offer that (E*Trade, Schwab, etc.). It's just like a regular brokerage account (except, in most (all?) cases, they won't let you buy options or trade on margin). With most such accounts, any cash balance is automatically swept into a money market fund until you need it.

>3. I think I want to invest in the FF. But I saw a
> few posts that questioned the foolishness of
> investing in the FF with an account over 15K. My
> roll-over will be several times that.

Other people are better equipped to answer that then I am (check the "Foolish Four" folder). But you can always expand to, say, the Foolish Five or Six, or the whole BTD-10. You can also invest in index funds, either through the brokerage IRA or with, say, a separate IRA at Vanguard.

> 4. Been watching the discount brokers board, but
> anyone have suggestions for a discount broker for
> IRAs on this board?

I've been fairly happy with Schwab, but the commissions are a bit higher than the others' ($29.95/trade). If your balance is over $15K, I don't think you'll have to pay custodial fees with any broker.

--AMS
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>>4. Been watching the discount brokers board, but anyone have suggestions for a discount broker for IRAs on this board?<<

I have been using Ameritrade for my IRA for about 4 months, and I can say, it's nice and cheap and it does the trick! I have heard horror stories but have had nothing but good luck.


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<3. I think I want to invest in the FF. But I saw a few posts that questioned the foolishness of investing in the FF with an account over 15K. My roll-over will be several times that.>

I would not suggest putting all your money in the FF or any other single strategy (unless you are just starting out and owning more stocks would require too much research and too many commissions all at once). However assigning an absolute number, be it $15K or any other, is, to me, silly.

Let us assume you wish to trade only the UV4 and the UG5. Pick whatever ratio between them you are comfortable with. One suggestion is to subtract your age from 100 and put that percentage into the UG5 and the rest into the UV4. If you are 40 years old, and have a million dollars, that would be $600K in the UG5 and $400K in the UV4. That $400K would be perfectly reasonable under these assumptions.
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<3. I think I want to invest in the FF. But I saw a few posts that questioned the foolishness of investing in the FF with an account over 15K. My roll-over will be several times that.>

The much-discussed $15K "cap" of Foolish Four investing came, I believe, from a TMFSheard article which recommended diversifying your portfolio once you *reach* $15K. IOW, Sheard is assuming you've started from some much smaller sum in FF & seen your money grow. He is merely saying that $15K mark is a good place to begin diversifying, IF you haven't already. As JeanDavid rightly points out, $15K in a vacuum is a meaningless rule of thumb. Your post didn't mention total sums invested, so you'll have to do the math & figure out if FF is the best place to put your entire 401K.

Regarding brokers, surf over to the Discount broker board & start reading. I use H2O-house & am happy.

Chris

PS- JackPoint, no broker in his right mind will allow margin trading inside an IRA. It's illegal! ;-)
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