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Subject:  Re: Roth IRA and the FF Date:  7/28/1998  10:36 PM
Author:  TMFPixy Number:  4728 of 97947

Greetings, AirCal, and welcome.

I started Roth IRAs for my wife and myself with the max $2000 contribution for '98. I placed her $2K in the Vanguard S&P 500 index fund. I want to invest my money in the FF, but don't know if it is too small an amount for that strategy to be effective. For instance, the commissions would eat %5 right off the top, and I might end up only owning 3-4 shares of certain higher priced stocks. Any thoughts?

We believe that you should keep your overall costs to a maximum of 2.5% of your total portfolio, and the lower the better. In your case, the cost of trading exceeds that limit. Therefore, you're probably better off keeping that money in a good no-load index fund like Vanguard's until you achieve enough cash to start trading at the 2% to 2.5% level of costs.


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