<joshbilsky@[EMAIL PROTECTED]
> wrote
> Last year I opened a Roth IRA and contributed the maximum
> 4k amount
> for both 2006 and 2007. Since I just started the account,
> I just
> stuck to the Vanguard STAR fund (VGSTX). This fund seemed
> like a good
> start since it is a "fund of funds".
VGSTX is about 60% stocks and 40% bonds and cash. If you are
young, then this is considered a mighty conservative (= low
risk, low return by historical standards) allocation. If you
are young, I agree with Andrew K that you should consider a
fund or combination of funds such that your stock exposure
is higher. I agree with John that ETFs are something to
consider, especially Vanguard ETFs for their low expenses.
Consider trying the free, interactive online asset
allocation tools linked at
http://ellessite.blogspot.com/2008/02/asset-allocation.html
. They will give you some suggestions about allocation based
on your risk tolerance.
Lastly, as Sandra suggested, the market is currently
considered a "good buy," so putting in your 2008 IRA
contribution now may be a good idea. It could go down
further, but if you're in it for the long run, and if
history is any guide, it will recover and then some.
Remember for 2008 your IRA contribution limit becomes $5000.
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