Friday, January 05, 2007

Piloting my ROTH (investing)

For some time now I have thought of ROTHs and mutual funds in tandem. Mutual funds seem to have all the diversity the “professional management” that I equate with a nice safe retirement. So as my wife and I have pitched nickels and dimes into a ROTH the money has always landed in a mutual fund. That is until a short while ago.

Toward the beginning of November (2006) I pushed a hand full of nickels into a ROTH opened with my favorite online brokerage. Now with this money I have none of the diversity or “professional management” but all the fun and excitement that comes from flying the plane instead of merely being a passenger. My thinking was this; surely I could beat the averages since I was only running such a small amount of cash. The money so concentrated that any winner picked would have a dramatic impact on my returns. On the other hand if I stepped on an Enron… well let’s not focus too hard on that hand.

So this year, with spousal support, I will take a turn at piloting my own ROTH. I know full well the long term hazards if this should go against me. This idea of picking individual stocks to place in a ROTH is probably not for everyone. (By the end of 2007 it might not be for me) I’ll let you know.

Do you pick individual stocks for your ROTH or fly with the “pros”?

That’s it for today. Here’s to great returns and fully funded ROTHs. And to keeping a sharp eye on your EveryDay Money.

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