Need help with Roth IRA

[deanie]

I’m about to go on deployment in 2 weeks I currently have my TSP set to 20% Roth C fund 90% and S Fund 10% I recently started my Roth IRA with Fidelity and I’m currently doing 100% QQQ is this wise? Or should I diversify my portfolio? I’m new to do this and I’m planning to go aggressive with my Roth IRA. Any advice for what I should invest into my Roth IRA since I’m already investing into the S&P 500 with the TSP what other ETFs should I look into?

 

[cristiano316]

@deanie Most of the people here (myself included) prefer broad market like FSKAX or FZROX

 

[abidingpatri0t]

@deanie Nothing wrong with an all S&P500 portfolio. QQQ is heavily tech. Any reason you're betting so hard on that sector?

Personally I'm VTI / VTSAX Vanguard Total Stock Market Index Fund plus some VXUS / VTIAX for international flavor. US returns have crushed international for the last decade. Will that continue?

Have a read of The Simple Path to Wealth. It sounds like you're just buying things you hear about without a long term plan.

 

[everyman]

@deanie This is what I do. 100% C fund in my TSP and then QQQ in my Roth.

QQQM is actually the better fund. It's the same holdings as QQQ but has a slightly lower fee.

 

[makubexx]

@everyman Why do you use the one with the higher fee?

 

[everyman]

@makubexx I just found out about QQQM like last week. I'm buying it going forward but haven't bothered to sell my QQQ to switch to QQQM yet. It's 0.2% vs 0.15% so not the end of the world either way. Both are great choices

 

[polcat]

@deanie Take a look at VYM.

 

[l86]

@polcat Dont do this. If you are looking to be aggressive go for growth not dividends. Dividend funds tend to under perform the market. Besides, why would I want to dump $ into companies that don't think further investment of profits will yield more growth so they just pay out dividends? I prefer a total market fund like VTI to chasing sectors like QQQ.

 

[davidolonge]

@l86 Agreed. The problem with dividends is a majority of people recommending them don't understand them. Dividends themselves don't increase your net wealth, because the stock price goes down equal to the dividend payouts. All they generate is passive income...which you can essentially duplicate nearly as passively by selling small portions of your non-dividend stocks. This also generates additional tax drag because you can't choose to not pay tax on the dividends today vs deferring it until you actually need the income.

So if you don't need extra income automatically hitting your bank account today, there's no need to use dividend stocks. And if you do, you can sell small portions of your non-dividend stocks and get the same end result.