Saturday, January 17, 2009

Roth IRA for 2009?

I am debating whether, in 2009, I should opt to invest in a new fund with Vanguard. I originally went with the 500 Index fund and now would like to invest in either the Total International Stock Index fund or the Small-Cap Index fund to offset the 500 Index. The reason I initially invested in the 500 Index was because I am considering, in the next 5+ years, using some of that money to help with a down payment on a condo. (Hopefully the markets will be back on the upswing by that time so I'll have some potential returns to utilize!)

From Wikipedia: "Up to $10,000 in earnings withdrawals are considered qualified (tax-free) if the money is used to acquire a principal residence. This house must be acquired by the Roth IRA owner, their spouse, or their lineal ancestors and descendants. The owner or qualified relative who receives such a distribution must not have owned a home in the previous 24 months."

Even if I do not decide to use those funds, I am still happy to have picked a broad index fund to begin my investing adventure with. I just want a bit more diversification in this economic climate. If I decide to add a different index fund to my mix for 2009, I will have to wait until I save up the initial $3K minimum to invest!


graduatedlearning January 24, 2009 at 5:46 PM  

wow,your post made me realize something: I've just been investing in one fund the whole time I've had my Roth IRA. I'm invested in one of those target date funds (2050, i think), partially because talking to the investment company I have my IRA with, they explained that I would just put money in there for a while, and once I built up a good amount of money, I can start buying other things.
I know that diversification is key, but I think I banked on the fact that the fund itself is pretty diverse. That and I knew I was limited at how small my investments could be (minimum monthly of $250 or something).
So yeah, I'm definitely going to change my investments!
As for what you should sounds like you should continue your plan of building up the minimum investment and going for it! The house thing sounds like a good idea!

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