I have a question about investing in the stock market?
I have 3 different accounts. A ROTH IRA, 401K at work, and a small trading account with a lost cost broker. I have a low cost index fund in the roth where most of my money is. I have the 401k invested in a mid cap fund. And with the trading account I plan to buy a few stocks or trade options to take profits here and there. Does this sound like a good investing plan???
Well, you have the beginnings of a plan. Do you have an emergency fund set up?? Within this, you should have 3 – 6 months of living expenses. That way if an emergency should arise, you won’t have raid your investments.
What is your IRA invested in?? You say low cost index fund, but there are many of these. There are large caps, mid caps, small caps, international, and even bond index’s. My 401k is exclusively index funds. My IRA, is mostly managed funds.
Do your asset allocation & then you can pick your funds. I’ve bought a few stocks, but I know zip about trading options. Make sure you know what you are doing when it comes to trading options. Maybe you can make money there, but then again, maybe not.