No. of Recommendations: 0
I am convinced into opening a Roth for self and wife.
We meet the AGI criteria.
Have a long way to go before retiring.

Thinking of putting it in a S&P 500 based index fund.
Have some questions.

1. Do you think it is a good idea to put this into such a fund?

2. Which one is a good one? I am thinking of putting it in Vanguard Index 500. Any suggestions?

3. How do I go about starting it with Vanguard?

4. Can I do it at anytime? Meaning should I open it right away knowing that I am going to do it anyway. Or wait until the cut off date for the taxable year.

5. What is the cutoff date for the year? Is it the calendar yr or April 15, 1999, for 1998.

6. How does one track the performance of one's Roth investment into a fund? Just follow the account status information the broker provides?

An Obvious Novice.
NS
Print the post Back To Top
No. of Recommendations: 0
Greetings, Naaree, and welcome.

I am convinced into opening a Roth for self and wife.
We meet the AGI criteria.
Have a long way to go before retiring.

Thinking of putting it in a S&P 500 based index fund.
Have some questions.

1. Do you think it is a good idea to put this into such a fund?

2. Which one is a good one? I am thinking of putting it in Vanguard Index 500. Any suggestions?

3. How do I go about starting it with Vanguard?

4. Can I do it at anytime? Meaning should I open it right away knowing that I am going to do it anyway. Or wait until the cut off date for the taxable year.

5. What is the cutoff date for the year? Is it the calendar yr or April 15, 1999, for 1998.

6. How does one track the performance of one's Roth investment into a fund? Just follow the account status information the broker provides?


For the beginning stock investor, an index fund IMHO makes a good starting vehicle for a long term investment. You will enjoy near market returns (and that includes losses) as you learn more about investing your money. It gives you breathing space as you learn how to trade on your own. Around Fooldom, we believe the Vanguard 500 is a great mutual fund to use for that purpose. Just call them or visit their website at http://www.vanguard.com and they will help you through the steps necessary to start your Roth IRAs.

You can open the accounts at any time, and the earlier the better to take advantage of the compounding of earnings that lets your money grow. As far as the cutoff, you have until April 15, 1999 to open a Roth IRA for the 1998 tax year. You should track your returns based on the anniversary date of your account. Deposit your money on 8/1/98 and calculate its growth as of 8/1/99 based on that initial deposit. Returns are time sensitive. The ones you see quoted in the papers or by the funds themselves are almost always based on performance since 12/31 of previous years. Thus, they rarely have applicability to the rate of return in your portfolio.

Regards….Pixy


Print the post Back To Top
No. of Recommendations: 0
Pixy,

That was a great insight. Just a have a few follow up questions.

1. Will the brokerage provide information on the rate of return on my Roth IRA account on a daily basis, like they do in stock portfolios? If not, is there anyway I can set this up in say Quicken or Yahoo to follow its performance?

2. If I want to open an IRA for self and my wife, they will be totally separate accounts, right?

3. Since I already have an Ameritrade account, could I put open the Roth IRA account there and invest in Vanguard 500? I know that sounds like a stupid question, but bear with me.

Thanks

NS.
Print the post Back To Top
No. of Recommendations: 0
NS,

1. Will the brokerage provide information on the rate of return on my Roth IRA account on a daily basis, like they do in stock portfolios? If not, is there anyway I can set this up in say Quicken or Yahoo to follow its performance?

The brokerage can certainly provide you the share prices on a daily basis, but few will do the actual calculations for return that way. If you want daily data (and IMHO that's far too often to get it unless you're a day trader), Quicken, Yahoo and others will let you set up a portfolio on-line that will handle such calculations.

2. If I want to open an IRA for self and my wife, they will be totally separate accounts, right?

It can't be any other way. The key word in "Individual Retirement Account" is the first one. An IRA cannot be held in joint ownership.

3. Since I already have an Ameritrade account, could I put open the Roth IRA account there and invest in Vanguard 500? I know that sounds like a stupid question, but bear with me.

Many brokers will allow you to hold mutual funds within an account, whether that is a taxable or IRA arrangement. Many will also charge you a fee for the purchase of shares in that fund. I have no idea what Ameritrade does, but if you ask I'm sure they'll tell you.

Regards…..Pixy

.
Print the post Back To Top
No. of Recommendations: 0
naaree

Don't check your return each day. For an index fund maybe look at it every couple of months. You are in for the long run and do not want to sell when the market goes down.
Print the post Back To Top