I want to open a roth ira, advice needed..thanks

[Guest sunpharee]

I read suze ormans Young fabulous and broke book..and I want to open a Roth Ira, I am 26, married with 2 small kids.

I am looking at scottrade.com to open an account, but I really dont know if thats the best way to go. My credit union says to call AIG for financial advising, but I think they are commission driven.

I want to invest in mostly stocks, but I do not understand how to see if they are no-load or what they charge. When I look at the prospectus, I don't feel comfortable that I'm reading the all of the fees correctly.

Can someone please recommend a few good places to invest. Suze reccommends "85% in an index fund that tracks the entire market and 15% in a foreign stock fund"

I'm fine with that, but I need a few names...you know the no load, low annual fee. I'll put my 85/15% there...I just need to know the symbol...

I'd like to get in before the 15th deadline for last year. So my questions are:

What company should I use to open an acount?

What are some investments that have great ratings, low/no fees? (i know this is a broad question...but I'm so lost in all the small print)

thanks,

Stacey

[Guest sunpharee]

doesnt anyone have any advice? am I not asking the right questions?

[txdd]

When you are just starting out and have a relatively small account, a no-load mutual fund is a great way to achieve diversification at low cost. Index funds are typically the lowest cost type of funds. Some of the big names with lots of no-load fund choices are Fidelity, Vanguard, and T Rowe Price.

Remember that the choice you make today does not lock you in as your needs change. It's easy to move your IRA between mutual fund companies/brokers. The important thing is to get started with what makes sense now.

[Guest sunpharee]

trowe has a good search engine thingy...

I'm thinking 85% in POMIX, PREIX or PEXMX and 15% in PIEQX

i think...lol

[John G]

If Orman motivated you to act, that's great. Understand that what you get with her is Disney does investing.... lots of glamour, thin on details, and the nuances get glossed over. I am no fan of Orman. The accuracy of her info has gotten much better in recent years.

T Rowe is reputable. The first three are more or less their version of index funds but with expense ratios (0.35 to 0.40%) about 2x higher than Vanguard - although they are still at the lower end of the range. They look like "reactionary" rather than "visionary" funds to me.... designed to cut into some of the index fund market share that Vanguard was growing. Nothing wrong with that - competition keeps everyone on their toes. I would describe the performance of these three as average relative to their peers. Everyone wants to be above average - but over the long haul average market performance still works, and no one can reliably tell you which funds or strategies will work best over the next few years. I might favor some of Vanguards offerings if I was going to go purely index - mainly because they have a long track record and keep dropping expenses.

The 4th fund is interesting - international from 21 companies, drawing from a universe of 1000 large size firms. Expense ratio is 0.50% - which is on the low end for international type funds, probably because this fund is index style. There is no huge compelling reason to have an international component - but if you wanted to follow the 15% logic, this fund would be a lot better than most international stock picker funds. US vs International - again, no one can tell you the better path in any given year.

About posting here - this site works because a few dozen accountants, tax professionals and fiancial advisors stop by to field some questions. The advice is generally good - but the turn around time is often days, not minutes or hours. For example, I will be travelling for the next six days and probably will not get much of a chance to look at posts.

Good luck with your choices.