what to do with $25,000

[junebug1965]

  I have $25,000 in a regular bank account, making pennies each month!!!!!!!!!! I have no idea what to do with this money, I checked out CD's at the local bank and they were not great either, I need some help / advise to were I can park this money and make more than a few pennies each month.
I should say that I do not need acess to this money, so it can be locked into something for a while.
I would be very grateful for any advise.
thanks

[pbkmaine]

When will you need it? In 5 years, in 10?

[matchewed]

What is a while? What is the money for?

[junebug1965]

 I think I will need it in 10years.

[junebug1965]

  I need to add that I am a homemaker, I retired last year at the age of 48.
I have a IRA (Rolled over my company 401k and I have a roth IRA....MY Husband still contributes to this for me (spousal roth).
My huusband works full time, and I hope he will be able to retire when he is 55, he is 49.
The money in question was money that I saved while I was working, so its been sitting doing nothing for a year.
thanks

[arebelspy]

I think I will need it in 10years.

Equities.

[junebug1965]

   arebelspy... would  I call fidelity about the equities..( I have my IRA and Roth with fidelty), and set it up with them ????

[arebelspy]

   arebelspy... would  I call fidelity about the equities..( I have my IRA and Roth with fidelty), and set it up with them ????

I personally would be buying index funds with that.  I have some funds with Fidelity's FFNOX, for example.  Look at the stock market 10 year returns throughout history.  The vast majority of the time you will be making a good amount (heck, look at what sitting out the last year has cost you).  There is risk, but it is greatly lessened on a 10-year time scale (and even less on a longer timeframe).

But you will need to decide your own asset allocation.

Do you have a written IPS?

I'd also suggest you go to jlcollins' website: http://jlcollinsnh.com/ and read his stock series.

[junebug1965]

arebelspy...
 I do have a  IPS...but I will admit I had no idea that it was called a IPS, just my long term goals and plan, thank you for posting that.

I will check out jlcollins web site, again I thank you for this information, guess I have some homework to do.

thanks again for taking the time to pointing me in the right direction.

[Another Reader]

I had never heard of FFNOX until now.  It's a well diversified fund of Spartan index funds with a fairly low expense ratio (on top of the minimal expense ratios of the underlying Spartan index funds).  Looks like a decent "set it and forget it" equity fund, weighted a bit towards the S&P 500.

[skidlystache]

I agree with arebelspy. Index funds are the way to go. If you're not glued to Fidelity I'd recommend Vanguard's Total Stock Market Index Fund. It has a low 0.17% fee. If you invest over $10K in that fund I believe you'll qualify for their Admiral Shares which reduces the fee to 0.05% (ridiculously low).  If you stick to your 10-year time horizon you probably want to keep it in the fund for at least 5 years.  As you get closer to 10 years you may want to move part or most of it to a more conservative fund (bonds/money market) so you don't lose principal if the stock market nosedives right before you take it out.

[arebelspy]

I had never heard of FFNOX until now.  It's a well diversified fund of Spartan index funds with a fairly low expense ratio (on top of the minimal expense ratios of the underlying Spartan index funds).  Looks like a decent "set it and forget it" equity fund, weighted a bit towards the S&P 500.

Right.  Its expense ratio is 0.22%, I believe.  I probably would try and go slightly cheaper if it were in taxable (and recreate the fund myself with the four funds it holds, or maybe tweak one or two of them), however it's in retirement accounts where rebalancing isn't the easiest thing to do, so I like the set it and forget it nature of the fund, where I can just contribute and it keeps a asset mix that I'm comfortable with in balance (and I realize I could do the rebalancing in taxable by looking at my portfolio as a whole, but I have reasons for not doing that).

I wasn't trying to endorse that, per say (though I would, obviously, for certain situations), but giving an example for the OP of the index funds that I hold with Fidelity.  :)

[Another Reader]

Fidelity has a Spartan total market index fund with an 0.07 percent expense ratio and a $10,000 minimum investment.  That's similar to Vanguard's fund referenced above.  However, these funds mirror just the US equity market.  They do not include foreign equities or bonds. 

I have found Fidelity's customer service to be better and their website to be more robust.  If you live near one of their investor centers, you can drop in and "visit your money."  The centers have helpful seminars and people that will answer questions.

[junebug1965]

  hi all,

  just a update...I called Fidelity   and placed half of the money in Fidelity's FFNOX, and the rest in spartan total market... they person I spoke to assured me that was a good choice!!!
the only reason I did not call vanguard was because all my other accounts are with fidelity, just throught it best to keep everything in one place.
so now at least I know I am making more than a few penny's each month.

thanks for all the input anad information, it really did make me feel better about making the decision.

[arebelspy]

  hi all,

  just a update...I called Fidelity   and placed half of the money in Fidelity's FFNOX, and the rest in spartan total market... they person I spoke to assured me that was a good choice!!!
the only reason I did not call vanguard was because all my other accounts are with fidelity, just throught it best to keep everything in one place.
so now at least I know I am making more than a few penny's each month.

thanks for all the input anad information, it really did make me feel better about making the decision.

Sounds like a good decision to me.

Now just contribute as much as you can as often as you can, and ignore the daily fluctuations of the market/account value.