Investment - what would you do?

[cbr shadow]

My wife has a Vanguard 401k from a previous job that was rolled over into a Vanguard IRA.  It has been sitting (stupidly) sitting there invested in money market and gaining nothing..  It's $4,700.  I'd like to know what the best thing to do here is..
After reading some things on this sight I'm tempted to invest it all into VTSMX index stocks and just letting it sit.  Would that be a good idea?  I had the screen up about to hit "submit" and then thought I'd run it by you guys first.   Is there any way to access this money?  If so, I'll put it towards a Roth IRA for my wife and still invest in Vanguard Index funds.

Here are our stats if it matters:
Age: Wife and I both just turned 29
Wife's Income: $90-110k / yr (depends on bonuses) before deductions
My Income: $48k / yr before deductions
Both have 401k's which were started late, so we put 10% of our pay into them.
Our savings is about $22,000
No car payments (I drive a 2001 Honda insight which gets 65mpg! - She drives a 2011 Kia Sorento)
No student loans
Mortgage: Recently refinanced - $209,000 @ 3.5% - FHA Loan so our mortgage is $1630 with taxes escro'ed in - $215/month of that is PMI! (stupidly bought a house with 3% down payment 4 years ago, now carrying a PMI.  Should have F'ing waited!!!)

Since changing our lifestyles around a lot (used to save almost nothing!) we're able to save about $2000/month extra after putting into 401k and our 'normal expenses'.

Anyways I'm prob giving way too much information - I'm really just looking into what to do with the IRA with $4700 in it :)
Thanks,
Ryan
Schaumburg, IL

[cbr shadow]

Any advice here, guys?

[Another Reader]

You would have to convert the rollover IRA into a Roth IRA and pay the taxes on the $4,700.  In your shoes, I would only do this if my marginal tax rate was 15 percent.  Otherwise, I would probably invest the money into whatever asset class is lacking in her 401k, or just use the Vanguard total market index fund until she has enough equities to construct an asset allocation.

[grantmeaname]

I'd roll it over. You could always roll it over into a traditional IRA now and then turn the traditional IRA into a Roth IRA when it makes sense for you.

For now you might get a better return paying your mortgage down to 80% (or 78%) LTV to get rid of PMI than you would in the market.

[cbr shadow]

unfortunately the PMI can't be dropped until 5 years after the loan started, which is this year - ouch!  I'm going to refinance again to try to do whatever I can to get rid of PMI - possibly a 15yr mortgage.