Penny Stock Picks 25
Is it smart to just invest 25 percent and save 75 percent for retirement?
I am 25 and make less than $20,000 a year. I just opened a Roth IRA and put American Century 2040 Mutual Fund in there. I put $250 and will automatically invest $25 every month until retirement. I have in an individual account VTI, VEU,BND ETFs, plus ALU, GE, INTC, MCD, and PFE stocks. I will put 145 in VTI, 105 in BND and 100 in VEU monthly for a couple of years. I am with Share Builder and they have $4 commissions . I know it is not good to count your whole retirement on Mutual funds/stocks and don’t save a penny. Your opinion? Is this smart? Could you please tell me about Roth IRA and investing for retirement? I was going to pick Vanguard 2040 mutual fund but I have to put $3000 and with American Century I can put $250 and invest $25; the expense ratio is higher but I don’t want to wait too long to invest for retirement. What does the term Turn over mean, like American Century 2040 Mutual Fund has a Turn over of 20.00 and Vangurd 2040 9.99? Etc?
At 25, you get the advantage of compounding-that is a great thing. RothIRA’s are a good idea. You basically pay tax on the money now and it grows tax free-that is a great advantage. You will have to keep the money in there for 24.5 yrs, though (there are some exceptions but you should probably plan on that). As far as your investments go, those look pretty good to me. With GE, PFE, etc, I would recommend joining those companies DRIP programs. That should help you out a bit especially with your investment horizon. Turnover denotes the average time that a mutual fund holds a stock. A turnover of 100 means that the fund (on average) holds the security for 1yr.
I would also recommend that you not solely be concerned about retirement. Sure, you get the benefit of compounding but you also have the opportunity to do a few things that you may not have the opportunity to do later in life. Anyway, good luck. Hope my answer helps you out a little bit.
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