With inheritance money, I started small Roth-IRAs for my 2 young-adult children. They are with Fidelity and are currently in money market. Assuming these young people don't cash them out in 5 years, what Fidelity fund(s) are good for this purpose? I would like something moderate that I don't have to monkey around with. Should I choose an index fund or asset allocation? SandyBeth
To clarify for others: Did you match the young adult children's earned income with as much as is allowed in a Roth for each? The earned income requirement can be persnickety with kids.
Once these kids reach the age of majority, they can take that money (less earnings) out at any time and spend it as they wish, BTW. There is no five-year requirement, unless you mean they are five years from the age of majority.
Make the kids use the various interactive tools free online and figure out an allocation, I say. Tell them they don't do it, then no Roth deposit.
Maybe you still choose the funds, but at least this might introduce them to investing for the long run. I would not rule out ETFs, either, especially Vanguard ones. Darn low expenses at Vanguard.
Yes, they both had enough earned income to cover the match.
They are in their late 20's, and know about the 5-yr requirement.
I would not
Already in Fidelity money market.
Deposits have no such requirement, only the gains or money converted to Roth. Is there any reason why they'd need to tap this money so soon? If not, this should be invested for the long term and nearly all in stock index funds. JOE
what
I have a Roth IRA also and a long-term horizon (40+ years). I put all of it ($5k) in the Fidelity Emerging Markets Fund with ~1% expense ratio. I also have Fidelity International Discovery Fund which I like. You may also want to consider is VWO (Vanguard Emerging Markets) ETF which has 0.2% expense ratio. I have a little bit in that as well.
With the US market indices tanking, i think there are good buying opportunities (index funds as well) so i'm looking forward to investing in them as well.
I'm with Joe. 100% distrbuted among large, mid and small cap index funds. Recently Fidelity cut their mgt fees for index funds.
Frank
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