Just made a Roth IRA, what index funds do I choose?

Investing
#1

Hi everyone,

I’m a 24 yr old who just opened a Roth IRA account with TD Ameritrade. I am completely lost as to which index funds I should buy into, and which ones to stay away from. I also just learned the difference between ETFs and Index funds, so I am looking into ETFs. I am thinking of purchasing a few shares in VTI which is an ETF I believe.

Hoping I can get answers on 2 things:

  1. Is VTI is a good start?
  2. Is there a trustworthy guide/website that I can use to make educated choices on the which index funds to buy into?

Thanks!

#2

Welcome @beemo96!

Congrats on getting started on your investing journey at a young age!

TD Ameritrade isn’t my FAVORITE brokerage for index fund investing… they seem to be more focused on stocks and ETF trading than buy and hold index fund investing. I might suggest Vanguard, Fidelity, or Schwab (or even Betterment if you want a really easy modern interface).

That said if you want to stick with TD, I’d probably go with a 3-fund portfolio like this:

In terms of trustworth guides (OTHER THAN PFC OF COURSE), I believe the Bogleheads have solved investing. They have a forum and a wiki, which I often turn to as a sanity check for the “right” thing to do. They also have a page on a three fund portfolio that gives ETF options you could buy through TD.

Note that any “total stock market” ETF or index fund will perform nearly identically. So there isn’t a “right” one to buy. Just pick three, low cost ETFs and stick with them for a few decades. You can never go wrong with Vanguard :slight_smile:

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What's your opinion on buying 2X or 3X leveraged ETF's?
#3

I chose Ameritrade based on a recommendation from a friend who does options trading. I probably should have done my own research. I haven’t purchased any stocks yet, so perhaps its not too late to switch.

Your posts have been extremely helpful in demystifying trading terms and concepts, and in lowering the entry bar for new investors like me. Thanks for the quick response :slight_smile:

#4

Yeah… options trading is not something I would get involved with to start. I also wouldn’t get involved with it as an expert. Buying and holding index funds is how you build real wealth. Everything else is chasing a buck, and more likely to keep you broke. :slight_smile:

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