Any good companies to suggest for Roth IRA?

[Guest shaselai]

I read the Roth IRA options and am interested in it and I am thinking of using Roth IRAs on Mutual Funds, not stocks or banks. There are a lot of companies out there and I see Charles Schwabb and Fidelity quite a lot on television. Anyone have any suggestions for the "best" company I should send my money to? Also, is mutual funds the best way to go? Stocks to me seems to be a bit risky and banks probably wont give me the best rates available. I want high returns but not too unstable at the sametime. Sorry to sound like a newb. Thanks a bunch.

[Guest allancoleman]

Suggest you consider Vanguard , shaselar . I'm paying a expense ratio ( annual fee ) for my Vanguard GNMA Admiral class shares ( VFIJX ) of 0.11% a year . Or 1.1% for a full ten year period . Don't get much cheaper than that .

Check'em out .

[Guest shaselai]

Suggest you consider Vanguard , shaselar . I'm paying a expense ratio ( annual fee ) for my Vanguard GNMA Admiral class shares ( VFIJX ) of 0.11% a year . Or 1.1% for a full ten year period . Don't get much cheaper than that .

Check'em out .

So they charge that percentage when you take it out after 10 years? Also, do you suggest Banks or brokers? Also, is mutual fund the best way to go or stocks? I dont want to make so many moves that i will end up paying tons of money for trades.. thanks

[Guest allancoleman]

No , their fee isn't that for a ten year period . Vanguard's annual fee is 0.11% a year for that GNMA fund ( VFIJX ) . IF I kept that fund for a full ten year period , I'd pay 1.1% for that whole period of time .

Can't suggest a bank or broker . I'm generally not very patient with banks . I've got a brokerage account with Schwab & Fidelity too and they're alright , but generally not as cheap as Admiral class shares with Vanguard .

I like mutual funds . Used to trade in the hey - days of the 90's , but quit after the 2000 sell off . There's lots of brokers offering cheaper trades so you have quite a selection now . Good luck .

[John G]

1. There are many mutual fund "families" - companies with multiple mutual funds. You can find lists of them in the Wall Street Journal, Money, Kiplinger Financial, etc. You can also track down funds using the internet. T Rowe Price, Vanguard, Fidelity, Strong, Scudder... just some of the many names. You can also buy mutual funds through discount stock brokers like Ameritrade, Etrade, Scottrade, Schwab, Fidelity, etc.

2. I would focus on NO LOAD funds. These have no initial commission charge and no commission when you sell them. There are literally thousands of these.

3. You say stocks are a bit risky... yet stocks are included in the portfolio of many mutual funds. Three big differences between you buying stocks and buying mutual funds: [1] funds are diversified - holding dozens to hundreds of different positions which is not practical for individuals, [2] you can easily buy mutual funds via modest dollar amounts (rather than share amounts) so you can get started with a smaller amount of money, and [3] you do not need to spend as much time in learning about companies.

4. Banks: some offer nothing but low yielding CDs. Others offer LOADED (commissioned) mutual funds or annuities (not recommended by me). I am not keen on using banks for investments, but it works for some folks, especially if they want assistance and a local "branch". Frankly, the banking industry seems about 10 years behind everyone else in product development, internet access, commission fees, etc.

5. More on risk: risk comes in many forms, and ALL investments have imbedded risks. For example, that CD may not keep you ahead of the rate of inflation. Roth investments are typically held for decades and over the long haul, capitalism is the driving factor... stocks tend to go up because our economy is expanding.

6. Nothing wrong with being a newbie. I highly recommend that you start putting at least 1 hour each month toward reading Kiplinger Financial, WSJ, Worth, Money, or library books. YOU are the most important person in your future investment success. Don't spend 5 or 10 times the number of hours looking at cars or electronics compared to minutes that some spend on investment assets.

[Guest shaselai]

thanks for the info! I was reading money and fool and they had some nice info about IRAs. I have a list of companies i want to check out: Vanguard, Fidelity,Ameritrade,etrade financial,scott trade, charles schwab,T Rowe Price. I think i will need to get more info on those companies (LOAD, commisions, trade costs etc.) before going with it. Thanks.

[John G]

There are many many good funds and brokerages that will work for you. Focus on the rules that will apply to your situation. Aim towards eliminating or reducing fees. Keep annual expenses down. Avoid commissions. You don't need the perfect solution, just a fund choice that will perform for you needs. Forget the grand slam, look for singles and doubles. You win a lot of games if you get on base.

[Guest archimedes_pie]

I use Ameritrade, and I love it. You have the option to use whatever investments you like: Stocks, Bonds, Options, or ETFs. This gives you the most control, I wouldn't use anything "pre-packaged" eventually you may become a more active investor and access to stocks and options can be very rewarding!

[Guest shaselai]

I use Ameritrade, and I love it. You have the option to use whatever investments you like: Stocks, Bonds, Options, or ETFs. This gives you the most control, I wouldn't use anything "pre-packaged" eventually you may become a more active investor and access to stocks and options can be very rewarding!

Hi, I did some research on the companies and I got down to a few- Scott trade, etrade, first trade and ameritrade. Ameritrade seems to have the best price 9.99$ for all trades but i am not sure if it will have all the funds/stocks i will need. First Trade seems very tempting with 6.99/ Stock and "free" mutual funds as long as I invest 500 for 180 days. There are thousands of them and it will take me forever to compare who has what. It seems you are having a blast with Ameritrade.... any other "hidden fees" Ameritrade might have?

[John G]

You are very likely to be using mutual funds - and with no loads (and all of the brokerages you cite have many no load options they support) you don't have to worry about commissions. I would not make a decision based upon stock commission rates - it just won't apply to you.

All of the funds you will need? When you get started, and for many years, you only need one or two mutual funds. Every one of the firms you listed will have hundreds of reasonable choices. Don't expect to make perfect decisions. Folks who have been investing for decades don't make perfect decisions. Rocket scientists don't make perfect decisions. You will learn many lessons over the coming decades about investing - and sometimes pay "tuition" for learning from mistakes. The single most important thing to remember is get started. If you don't like your choices or custodian or mutual fund, you can always do a transfer or exchange down the road.

Schwab, Fidelity, Brown and Company... there are many other brokerages that offer mutual fund connections. Most of these have good websites with information for beginners (you can visit before you have an account), have relatively low error rates, and provide good monthly statements. You may prefer a firm that has an office in a nearby city. Annual fees for IRA/Roths range from ZERO (a very good number) to minimal $10-15. Anything beyond that should be avoided.

[Guest shaselai]

should I go for exclusively mutual fund companies or brokers with mutual funds? I read Killinger and they said its best to have mutual fund companies for mutual funds since they work exclusively with it instead of brokers with mutual fund on the side.

[John G]

Your choice.

You may lean towards brokerages if you have other accounts with them, or because you can invest in funds from two different families. But, most mutual fund families have enough funds (some have 40+ choices) that you could stay with Fidelity, Vanguard, T Rowe, etc. and have 2 different kinds of no load funds. You might favor one approach because they have a local office.

There might be minor difference in annual fees you will pay depending upon your total assets and single shot vs monthly election. Frankly, annual fees are often waived (if you just ask, if you elect for email statements, or if your assets grow beyond X,XXX, or if you have other business with the firm). I would not worry about a $10-15 charge but it's always nice to have zero.

Basically, most of these companies look a lot alike because "we" the marketplace are driving them to compete for our business. When one company comes up with something slick, others copy it. And, the general trend due to increasing internet/electronic ways of handling finances is for costs/fees/expenses to decline.