Roth Ira

[pack1]

Any good tips on where to start investing with a Roth Ira? I am more on the conservative side and would rather let it sit for the most part as opposed to constantly trading etc.

[mercaz1]

target fund from vanguard if you are really lazy or any good mutual fund that you like

[AJK]

target fund from vanguard

+1, an excellent choice.

Pick a retirement year, allocate, and sit back.

If your a bit more risk-happy, pick a retirement date farther out in the future so that you're more heavily weighted in equities.

[Newcc]

target fund from vanguard if you are really lazy or any good mutual fund that you like

What do you mean by if your really Lazy?

[skyguy918]

What do you mean by if your really Lazy?

Target funds balance their portfolio to get less and less risky as the target date (you select the fund based on a target date - usually when you reflect to retire) approaches. So it's considered the 'lazy' option, as you just dump the money in and let them take care of the rest.

[Newcc]

Target funds balance their portfolio to get less and less risky as the target date (you select the fund based on a target date - usually when you reflect to retire) approaches. So it's considered the 'lazy' option, as you just dump the money in and let them take care of the rest.

I see. TFS

[Sammy82]

Target funds balance their portfolio to get less and less risky as the target date (you select the fund based on a target date - usually when you reflect to retire) approaches. So it's considered the 'lazy' option, as you just dump the money in and let them take care of the rest.

I think all brokers have finds like this. I know my Fidelity 401k has Freedom40 Freedom45, Freedom50, etc for the same purpose.

[skyguy918]

I think all brokers have finds like this. I know my Fidelity 401k has Freedom40 Freedom45, Freedom50, etc for the same purpose.

Yup, certainly the big ones like Fidelity. However, I agree with the multiple recommendations upthread for Vanguard, as they consistently have the lowest expense ratios.

[AJK]

Yup; that's what I do. Dumped $ in target retirement fund (pushed out date of retirement to be more aggressive) and let them auto-reallocate.

[JTZ]

Yup, certainly the big ones like Fidelity. However, I agree with the multiple recommendations upthread for Vanguard, as they consistently have the lowest expense ratios.

...but do they consistently have the highest returns?

[skyguy918]

...but do they consistently have the highest returns?

If we're talking about comparable ETF's, then there should be no significant difference. They're designed to follow a very specific purpose. So if you look at the 4 main S&P 500 ETF's, you'll see the performance among the group is effectively identical (very small percentage difference based on the time period you're looking at). With a target fund, you'll definitely see more variation, but they're basically all executing the same script. These things are built on modern portfolio theory. It's not like a general mutual fund, where the fund manager is making very subjective picks.

[JTZ]

Target funds allocation is different or do I have that wrong? I don't use them.

Would two 25 year target funds from different issuers have the same allocation?

[skyguy918]

Target funds allocation is different or do I have that wrong? I don't use them.

Would two 25 year target funds from different issuers have the same allocation?

Target funds (mutual or ETF), are generally in the category of fund of funds. They hold a mix of stocks and bond funds which they gradually adjust to be safer and safer as the target date approaches. The percentages of the split that each target fund holds are likely to be very similar, while the actual assets that make up each portfolio will have greater variation. However, if you wanted to see the performance of 2 different funds in comparison, it'd be pretty hard, as it's a very recent idea (at least for ETF's).

[AJK]

Would two 25 year target funds from different issuers have the same allocation?

No, they wouldn't.  Nor would they necessarily have the same asset allocation.

But they should follow the same general approach, i.e. becoming more and more conservative as "target retirement date" approaches, going from equities, to bonds, to cash.

[skyguy918]

No, they wouldn't.  Nor would they necessarily have the same asset allocation.

But they should follow the same general approach, i.e. becoming more and more conservative as "target retirement date" approaches, going from equities, to bonds, to cash.

The actual stock/bond splits are gonna be pretty close. But the actual assets will definitely be more divergent than the split.

[Yo ssi]

Updated for 2020 - what's the best account?

[VacationLover]

Updated for 2020 - what's the best account?

VTI?