Should I invest in index funds or buy individual stocks for my Roth IRA?
Asked 4 years ago
In a Roth, would you do index funds, say voo or something similar, or should I actually do individual stocks? I already have a taxable account in M1 finance for dividend building, and index funds for Roth? Opinions?
Andrew Moran
Wednesday, July 14, 2021
Since this is most likely a long-term investment, you would be better off parking your Roth IRA funds in an index fund that mirrors the composition and performance of something like the S&P 500.
This is also true if you are not someone who routinely monitors the stock market. If you dollar-cost average your Roth IRA, your index investing can yield as good of a return as picking individual stocks.
Moreover, index funds can still provide you with dividends. In some cases, if you find the right exchange-traded fund (ETF), you could also earn a monthly payment.
That said, if you prefer individual stocks, some good ideas would be:
Procter & Gamble Co (PG)
- 07/13: $137.00
- Dividend Yield: 2.54%
Wendys Co (WEN)
- 07/13: $22.79
- Dividend Yield: 1.76%
Apple (AAPL)
- 07/13: $145.64
- Dividend Yield: 0.6%
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