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Hi everybody,

I was planning on putting money(for me and my wife) into the Roth IRA for this year. Got some questions.

1. Is it better to put it into a Foolish Four approach as opposed to an index fund(per 9/23 FF report), say Vanguard, which I understand is the best there is, from Fooldom.

2. In that case should I start it in January, based on 9/22 FF report, since it is IRA money?

Naaree.
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Naaree, you ask:

I was planning on putting money(for me and my wife) into the Roth IRA for this year. Got some questions.

1. Is it better to put it into a Foolish Four approach as opposed to an index fund(per 9/23 FF report), say Vanguard, which I understand is the best there is, from Fooldom.

2. In that case should I start it in January, based on 9/22 FF report, since it is IRA money?


What's" better" is in the eyes of the beholder. All that matters is what you think is better from a standpoint of cost, comfort and understanding of the investment involved. If you're just investing $2K in each account, you very well may be far better off using an index fund until the accounts are of sufficient size to keep trading costs well below 2% of your total portfolio.

And there's no need to wait until next January to start using the FF. While the returns may be marginally better in doing so, there's no overwhelming reason to do so. Instead, you may determine the FF as of any date and use that as your trading date. The difference in return won't be great enough IMHO to justify waiting for a new January to roll around. The earlier you start the compounding process in your IRAs, the better.

Regards…..Pixy
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What's" better" is in the eyes of the beholder. All that matters is what you think is better from a
standpoint of cost, comfort and understanding of the investment involved. If you're just investing
$2K in each account, you very well may be far better off using an index fund until the accounts are
of sufficient size to keep trading costs well below 2% of your total portfolio.


Mr. Pixy, if you dont mind, a follow up please.

I agree that I should start with an Index fund. But since I am leaning towards trying FF at a later point in time, say 2 or 3 yrs.

1. Should I start this with a broker whose IRA fees is low. Or should I start the index fund with Vanguard and later on transfer it to the broker.

2. Can I put it in VFINX from any brokerage IRA account or just with Vanguard?

Naaree
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>> 1. Should I start this with a broker whose IRA fees is low. Or should I start the index fund with Vanguard and later on transfer it to the broker. <<

Well, if you're sure you want to start with Vanguard funds, go directly with Vanguard (IMO).

>> 2. Can I put it in VFINX from any brokerage IRA account or just with Vanguard? <<

Other brokerages may offer Vanguard funds, but I believe that only Vanguard sells them with no transaction fees.
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Naaree, in a follow-up, asks:

Mr. Pixy, if you dont mind, a follow up please.

I agree that I should start with an Index fund. But since I am leaning towards trying FF at a later point in time, say 2 or 3 yrs.

1. Should I start this with a broker whose IRA fees is low. Or should I start the index fund with Vanguard and later on transfer it to the broker.

2. Can I put it in VFINX from any brokerage IRA account or just with Vanguard?


LOL....At being called "Mr." that is. Just call me "Pix," or if that's too informal then Pixy will do just fine. :-)

Some brokers will charge fees for the purchase of a fund and assess an annual IRA fee for records keeping as well. It really depends on the broker, but my inclination is to just go with Vanguard and worry about the broker when I'm ready to switch to a self-directed account a couple of years from now. Moving the money at that point in time is easy and cheap, so I wouldn't even worry about the broker until I was ready to use one.

Regards....Pixy
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