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I am very new to investing so I came here to get some help! Right now, all of my money is in SPDRs (SPY). Is this a very good place to keep it for the long term?

I'd say it is a good place to keep part of your money, but not all of it. Think about it this way: SPY covers just the large US stock market and so you don't have any international, small-cap or bond holdings.

I want to put it in something consistent and for the VERY long term.

Good luck finding something that will deliver returns above inflation consistently over the long term. Stocks are risky and historically have had a down year about one in every 4 or so which is worth noting here. If you don't want that then you have to be careful what you try to go with as if interest rates get low like they did in 2002 then bonds won't be yielding great returns either.

I don't have the time to check my investments very often, so I want something where I can leave it and not worry too much.

Ok, but would one day a year be that often? I don't think so. If you do want a totally "Set it and forget it" type of investment then a Target Retirement fund from Fidelity, Vanguard or T. Rowe Price would be a better suggestion than the SPDR as they will adjust the asset allocation over time.

I have read elsewhere that SPDRs are good for that because they always follow the market and never earn less than the market.

Not true. SPY tends to lag the index by about 12 basis points if you look on Morningstar's return data. While it should follow the index closely, the expenses do cause a bit of a drag though there are other factors as well.

This year for my IRA, should I continue putting all of my $ in SPY or should I branch out some?

Well, do you have a strategy if you did branch out? What would be your buy and sell criteria?

I have done some research and found that FAIRX looks to be a great mutual fund. Should I invest some in that or do you have any other ideas.

What are the conditions under which you'd sell if you did buy into FAIRX or would the money be invested forever and you'd never ever sell? Similarly for any other investment you would consider as well as depending on where the Roth is at would there be a fee for buying into that fund from that broker? I would likely suggest looking an international ETF if you want to stick to those types of investments and expand what you have but that is just an idea.

I'd also note that in 2003 that FAIRX didn't look so good as it finished in the bottom 5% of its category that year. Have you researched into why that was?


(Who likes the two mutual funds in his own Roth IRA and does have his own sell criteria)
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