Skip to main content
This Board Has Moved

This board has been migrated to our new platform! Check out the new home page at discussion.fool.com or click below to go directly to the new Board on the new site.

Go to the New Site
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
Subject: mutual fund vs. IRA?
Author: Twilight21 Date: 8/14/00 2:20 PM Number: 725
What is the ACTUAL difference between a mutual fund and an IRA? I was initially interested in opening a trad IRA, but was asked by a rather aimable broker why not consider a mutual fund instead? I liked the long term effect of an IRA, but is that all its good for? What about withdrawals? tax liabilies?
What happens to the funds going into each different account? These may come as silly questions, but it is always good to be definate when it comes down to investing.

Twilight :-)
=======================================================
Twilight,

I would suggest going to Fool School first.
http://www.fool.com/school.htm.

Then check out the IRA section.
http://www.fool.com/money/allaboutiras/allaboutiras.htm

This will help you understand for yourself what's going on. I will try my best to summarize for you.

An IRA is a tax advantaged retirement account (Individual Retirement Account). There are two popular types, Traditional and Roth. Go to the IRA section to learn about them.

A mutual fund is, for all intensive purposes, a grab bag of stocks. It is usually managed by a professional money manager at some fee equal to a percentage of your assets.

You can most definitely open a traditional IRA, contribute anywhere up to $2000 (maybe $5000 one day soon) annually and then purchase whatever securities you choose, including mutual funds. There is not an either-or with an IRA and mutual funds. It is more of a cooperative or combination of the two. I don't have a good feeling about this broker person. They should know that, and in making a recommendation like that, they lead me to assume that they do not have your best interests in mind.

Just my too sense
--TabbOne
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.