Roth IRA

[msparks]

I started a Roth IRA several years ago (about year 2000) I did this through my mutual fund company (Janus) and have contributed every year. Well I always said when it gets to $20,000 I would quit investing in mutual funds and then start a new Roth in a regular brokerage account.

Well as of today I'm about $500 shy of the $20. Now I'm wondering if I should make the move or not.

Any pro's and con's to either continuing to fund this account, or change and fund a direct brokerage account. I'm already an investor and have a taxable account with some money in it. I think I can do better on my own both long term and in the short run.

The biggest problem that I see, is that the Janus is setup with an automatic monthly investment. It's easy to do since I don't think about it. With the brokerage account, I would have to either remember to do it every month or do one lump sum either a couple times a year or once at the beginning/end of the year.

I would eventually like to get where I'm fully invested on Jan 1 of that year. Meaning I dump $4000 in the account at once.

 

[kanling]

I think the main considerations are cost and convenience. If you trade freqently, the brokerage commissions can take a heftier percentage that what Janus charges. But, if you buy and hold, the brokerage can be cheaper.

Going to brokerage, you may give up some of the convenience of automatic investing, as you say. But investing only a small amount every month would increase your costs badly anyway due to the commissions.

If you plan on picking individual stocks for your Roth in a brokerage, that in itself can be a lot of work... enough extra that it makes remembering to actually make the non-automatic investment very minor.

Several years ago, I personally decided to do it the dumb easy way. My Roth's in an index fund at a low-cost mutual fund company. I don't think about it but once a year when I put in my contribution. And I try to ignore the stock market as much as I can.

 

[Pablo]

It really depends on frequency/trading patterns. I don't know too much about Janus, but Fidelity brokerage is sweet. Inexpensive, plus I can hold funds very easily as well.

 

[Al]

According to a lot of people (see book below) in the know..you are better off by putting a given of money in regularly like you are doing to "cost average". If you are in well diversified funds with low expenses you might be better off staying where you are. If you want a different family of funds you could transter the Roth to say Fidelity or Vanguard to get better diversification. I happen to like Fidelity bc their online accounts are the best and you can go outside their "Family of Funds". Just a thought.

 

[ediamiam]

quote:

---

Originally posted by Pablo:
It really depends on frequency/trading patterns. I don't know too much about Janus, but Fidelity brokerage is sweet. Inexpensive, plus I can hold funds very easily as well.

---

If I recall correctly, Janus was hot in the late 90's. Their Janus20 fund was making a lot of money off of some technology picks. They started having problems when a number of their funds started overlapping in the same tech sector, and we all know what happened to technology. The whole point to having funds is to diversify under various themes. They seemed to have lost sight of this.

 

[msparks]

quote:

---

Originally posted by ediamiam:

---

If I recall correctly, Janus was hot in the late 90's. Their Janus20 fund was making a lot of money off of some technology picks. They started having problems when a number of their funds started overlapping in the same tech sector, and we all know what happened to technology. The whole point to having funds is to diversify under various themes. They seemed to have lost sight of this. [/QUOTE]

That was true in the 90's. They've changed around some of their funds and are more diverse now. Right now I have a Woldwide, a Healthcare, a small cap and a contrarian type of fund.

If I went with a brokerage. I would be doing either ETF with a minimum of $1500 on each trade. So the first year would only be about 2 or 3 stocks. Keep adding stocks as the fund comes up in value.

I might not change it over until the end of the year. But it nice to have set a goal of $20K in retirement and have gotten their in less than 5 years, especailly in some seriously down years.