Roth Advice?

[Sheryl]

Yeah, I know I’m lazy. But with so much expertise on this board, why should I actually think?

I am moving $8k (06 and 07 contributions) into my Roth. It’s at Fidelity and now holds about $14k worth of FFNOX, their fund of 4 index funds, with ER of 0.08%. I like this.

Should I just dump the $8 in with it, or go for something a little more aggressive? This is a very small part of a generally conservative portfolio full of blended funds, and such.

What kind of investments make the most sense for a ROTH?

Thanks!

[FinanceDude]

Ok......... the simple answer? Put funds in your ROTH that are guaranteed to grow faster than your wildest imagination!!

A realistic answer? The biggest problem for ROTHS in general is NOT FUNDING them...............so if you like what you already have, and it fits in your risk tolerance, don't re-invent the wheel...........

[Sheryl]

Quote:

Originally Posted by FinanceDude Ok......... the simple answer? Put funds in your ROTH that are guaranteed to grow faster than your wildest imagination!!

And for a small fee, you'll advise me on what these are??

And then in my other accounts, I should select those funds that are clearly never going to go anywhere, right? Dah-em you advisers are smurt.

[Goonie]

Quote:

Originally Posted by FinanceDude A realistic answer? The biggest problem for ROTHS in general is NOT FUNDING them...............so if you like what you already have, and it fits in your risk tolerance, don't re-invent the wheel...........

I agree. Because I REALLY like the fund that my ROTH is in, when I ER next month and have my ROTH fully funded for 2007, I'm opening a new account (taxable) using the same fund. I like my current fund because it performs well, has the right amount of risk for me, and I just generally like it! I have looked into other funds, but still like my current one the best. So as FD said...."don't re-invent the wheel".

[yakers]

Although I would not recommend them now, for several years the Roth was a good place for REIts. I just have my asset alloction fund there (VAAPX) but I am satisfied with that fund. Because a Roth is tax free it is particularly good for tax inefficient funds.

[FinanceDude]

Quote:

Originally Posted by Sheryl And for a small fee, you'll advise me on what these are??

No, it appears AirJordan is our resident mutual fund "guru" these days.........

Quote:

And then in my other accounts, I should select those funds that are clearly never going to go anywhere, right? Dah-em you advisers are smurt.

You doth misspeak me...........look at my thread.........I told you NOT to reinvent the wheel..............translation...........if you like how FFNOX has done, do the $8k in that.............

[Peaceful_Warrior]

I'm using a somewhat self-directed IRA to get non-traded fixed income assets into there. I get charged an annual fee, but since the fee is fixed (not %) I don't mind it being more up-front than I'm comfortable with knowing that in the future it will be almost totally irrelevant.

[simple girl]

Quote:

Originally Posted by Sheryl Yeah, I know I’m lazy. But with so much expertise on this board, why should I actually think? I am moving $8k (06 and 07 contributions) into my Roth. It’s at Fidelity and now holds about $14k worth of FFNOX, their fund of 4 index funds, with ER of 0.08%. I like this. Should I just dump the $8 in with it, or go for something a little more aggressive? This is a very small part of a generally conservative portfolio full of blended funds, and such. What kind of investments make the most sense for a ROTH? Thanks!

I agree, if you like the fund, keep it. Although it depends on what asset allocation you've set. ie. are you balanced? Will you still be balanced (according to your goals) after dumping the $8K in? If not, then remember to move some $ around in your other funds, or choose a new fund to maintain your asset allocation. With lots of blended funds, I think it's harder to know what your asset allocation is without using one of those on-line portfolio analyzers.

Also, if you have a taxable account, this may drive what you choose for a Roth or 401K, since you'll want to keep funds that minimize taxes in your taxable account, and vice-versa.

BTW, I looked up FFNOX on M*. It lists it's expense ratio as 0.29 (not that that's bad, just different from what you said)

[terminator]

Quote:

Originally Posted by simple girl BTW, I looked up FFNOX on M*. It lists it's expense ratio as 0.29 (not that that's bad, just different from what you said)

And Fido's web site says it is .21%. The investor class of most (all?) of their other index funds have ERs of .10% (that's what the website says anyway).

[Sheryl]

Quote:

Originally Posted by simple girl With lots of blended funds, I think it's harder to know what your asset allocation is without using one of those on-line portfolio analyzers.

Yeah, I actually have them all entered in a spreadsheet that calculates this - I just check a couple times a year to see if the blends have changed their allocation -they don't change much.

Quote:

Originally Posted by simple girl Also, if you have a taxable account, this may drive what you choose for a Roth or 401K, since you'll want to keep funds that minimize taxes in your taxable account, and vice-versa.

I need to work on this more. I don't really know which funds minimize taxes - ones with low turnover, I guess? We don't have state income tax here, at least.

Quote:

Originally Posted by simple girl BTW, I looked up FFNOX on M*. It lists it's expense ratio as 0.29 (not that that's bad, just different from what you said)

Interesting - I got my info from Yahoo Finance: http://finance.yahoo.com/q?d=t&s=FFNOX I thought it sounded really low. Fido's own site says 0.21. [edit: as was previously noted. ]

Just goes ta show ya... something or other!
Thanks for the input.

[eridanus]

FFNOX is a fund of funds. Unlike Vanguard, Fidelity charges an ER to manage the rebalancing. The .08 is probably in addition to what the individual funds charge (Spartan 500, etc.).

[simple girl]

Quote:

Originally Posted by Sheryl I need to work on this more. I don't really know which funds minimize taxes - ones with low turnover, I guess? We don't have state income tax here, at least.

I tend to follow the suggestions by Taylor L on the Vanguard Diehard's forum: http://tinyurl.com/ypqzms
(see response #5)

Also, the following post by Grabiner (response #3, "look at the fund's strategy") on the Diehard's forum helped me understand this topic better: http://tinyurl.com/2btksu

[Gumby]

We have only small Roths, because we exceeded the income eligibility requirements many years ago. They are 100% in VGSIX (Vanguard REIT index fund), which has worked out well.