unfortunately im 26, 5k is 20% of my retirement portfolio. i know you deal with stocks all day but i don’t have the time, the patience, or the stomach to watch the wild swings and try to make a quick buck. i do appreciate the advice but i can’t commit to strategy’s like that right now.
i haven’t turned my back on stocks overall. ive had indexes since i was a kid, which is where the majority of my money has been, but for the retirement portion of my assets i was looking to be a bit more conservative in this climate and did not want to dedicate hours each day to manage it.[/quote]
Since this is your retirement investment and you’re 26, an you don’t have time, stomach, or patience to pick stocks, then stay with index funds. I think putting the $5K in a Vanguard Money market and then cost average into index fund(s) is a great idea. For tax year 2009, you can set up automatic contributions monthly/bi-monthly into your Roth account. Just divide your 5K into 12 or 24 installments. That’s what I’ve been doing for the last four five years. You won’t even miss the money.
Again, this advice is only for people like me who have a looong horizon, don’t have time to do too much research, and don’t have stomach for riding individual or even sector picks.