Author Topic: Trading in Roth IRA (Vanguard)  (Read 3392 times)

ginklord

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Trading in Roth IRA (Vanguard)
« on: December 28, 2015, 09:08:27 AM »
Hi,

I recently rolled over my 401K to Vanguard, with most of it now in a traditional IRA. I'm investing that in Total Stock Market funds, both US and international.

I do have some cash ($3k) that rolled over from ROTH 401k contributions, now sitting in a ROTH IRA with Vanguard. It's a pretty small amount, so I'm thinking about getting really aggressive with it to try and make some big gains. Any suggestions on ETFs or a mutual fund that I should invest in to take advantage of the tax free growth in a ROTH?

Thanks!!

seattlecyclone

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Re: Trading in Roth IRA (Vanguard)
« Reply #1 on: December 28, 2015, 09:12:33 AM »
Invest according to your preferred asset allocation. Don't make crazy bets with some of your money simply because it's in a Roth account.

Joel

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Re: Trading in Roth IRA (Vanguard)
« Reply #2 on: December 28, 2015, 11:38:49 AM »
Invest according to your preferred asset allocation. Don't make crazy bets with some of your money simply because it's in a Roth account.

Agreed. Stick with vanguard total stock market index fund.

jim555

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Re: Trading in Roth IRA (Vanguard)
« Reply #3 on: December 28, 2015, 01:04:42 PM »
Roll the dice, levered 3x ETFs.  Don't blame me when it blows apart.

MustacheAndaHalf

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Re: Trading in Roth IRA (Vanguard)
« Reply #4 on: December 28, 2015, 01:10:55 PM »
What would your statement sound like if you replace "gains" with "losses"?  Then you would be looking for an aggressive investment that could make big losses.  Since nobody can't predict the loss or gain, you can't predict the big loss or big gain.  If you're willing to consider another goal, how about putting the least tax efficient stock fund in the Roth?

ginklord

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Re: Trading in Roth IRA (Vanguard)
« Reply #5 on: December 29, 2015, 07:04:27 AM »
Just what I needed to hear, thanks everyone!!

MustacheAndaHalf - I'm always willing to at least consider it. What do you recommend?

MustacheAndaHalf

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Re: Trading in Roth IRA (Vanguard)
« Reply #6 on: January 02, 2016, 09:32:03 PM »
Best bet is probably an international fund - like one you already have in your 401k.

One annoyance with a separate $3k account is that you can't rebalance.  If that $3k falls to $2.7k, you can't sell something else and purchase $0.3k to bring it back up.

If you have an allocation to REITs, those tend to put out more taxable income than other stock funds.  So a REIT would also be a good candidate for the $3k Roth IRA.

Depending on your income level, you can make your own Roth IRA contribution in 2016 now.  Below $116,000 (single) or $183,000 (married filing jointly) income you can contribute $5,500 to a Roth IRA.
https://www.irs.gov/Retirement-Plans/Amount-of-Roth-IRA-Contributions-That-You-Can-Make-For-2015
So it's possible you could give that $3,000 Roth IRA some company.

CanuckExpat

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Re: Trading in Roth IRA (Vanguard)
« Reply #7 on: January 03, 2016, 03:07:11 AM »
The best advice you got is probably to continue to invest according to your investment allocation (keeping in mind the principles of tax-efficient fund placement).

If you want to gamble, you can hold exotic investments like penny stocks in a tax sheltered account if you pick a provider that allows it.

Stick all your money into something extremely cheap, if it doubles in value, so did your position, if it goes to nothing, well you didn't really want that money did you? Though you may as well go to a casino and put it all on the roulette wheel, at least then you'd get some free drinks.

Also worth reading this: 5 Ways To Double Your Investment.

joninnyc

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Re: Trading in Roth IRA (Vanguard)
« Reply #8 on: January 03, 2016, 07:13:50 PM »
Try and look at all your assets, tax-advantaged and otherwise, and get a sense of what your asset allocation is. This should include real estate, cash, stocks, bonds, etc. You may be surprised what you actually end up with! You can do this pretty easily with Excel. Then decide what you actually want, and how you want to allocate that little bit to achieve that goal (say 50% real estate, 30% stocks, 10% bonds, 10% cash for instance)