Cut to the chase.
There is no hurry to make decisions on where to place money in one's Roth IRA.
Just make sure you have a Roth IRA and that it is funded by April 14th (technically April 15, I suppose) for your 2024 tax year.
Until we get a bit more clarity in the market, parking your Roth IRA contribution in a money market fund or cash within your Roth IRA account probably makes the most sense.
Having said that, there's almost no wrong decision.
The equity (stock) market has pulled back from record highs earlier this year, making it a great opportunity to buy some great shares at a very low price.
Regardless, you have 30+ years of investing in front of you.
My advice: just keep your money in a money market fund or cash within your Roth IRA and wait for some clarity.
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Roth IRA
If one's Roth IRA is less than $10,000 total and you decide to move from money market funds to an equity (stock) portfolio, I would not buy individual stocks.
If one's Roth IRA is less than $10,000 total and you decide to move from money market funds to an equity (stock) portfolio, I would recommend an ETF among the family of ETFs offered by your account manager (for example, Fidelity or Schwab).
Examples of ETFs in Schwab that I recommend:
- SCHB: broad-based large cap; growth potential; currently overweight in tech stocks.
- SCHG: large cap stocks, with more balanced portfolio; concentrates on growth, not dividends
- SCHD: large cap stocks, with emphasis on dividends
Of the three (SCHB, SCHG, SCHD) for young investors with a 30-year horizon, I recommend SCHB.
I do not follow Fidelity, so I can't recommend specific funds in Fidelity but I can do some research later.
