Friday, September 26, 2008

Strategizing the last $2,000 for my 2008 Roth IRA


Earlier this year, I put $3,000 into a Vanguard index fund in my Roth IRA, leaving me with $2,000 to invest for 2008. Unfortunately, though Vanguard is otherwise awesome, its $3,000 minimums to invest in new funds conflict with the $5k limit Roths currently have.

Last year was my first year investing in a Roth. The 2007 max was $4,000, so I put $3k into an index fund, and the rest into the truly awful Vanguard STAR fund, which has a $1,000 minimum. I figured that after a year, I could move that money into a new fund with the remainder of my 2008 investment, so that I'd have money in three different index funds. But, since the economy/market decided to tank within weeks of my 2007 investment, I'm well under $1,000 and therefore don't have enough to open a new fund.

Today I decided to stop putting this off and to just suck it up, so through the end of the year I'll be weekly auto-investing the remaining $2,000 into the two funds I'm already in. I'm sure things will get worse, and I'll lose money some (or most) weeks, but it can't hurt to try to balance out my cost basis a bit. I figure that buying in weekly can only help me. And I'm certainly following the conventional wisdom to buy low, that's for sure. ;P

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