 Dear
Dr. Don,
I am a young investor with a Roth IRA. I intend
to invest soon for 2007, but would like to wait
for just the right market moment to "pull the
trigger." What is the best place to park my cash
until then? I'd like to put it in a money market
account at the same institution as my Roth IRA
in order to make the transaction as quickly as
possible. Can a money market be a part of my IRA
portfolio?
-- Ethan Equities
 Dear
Ethan,
If you already have a Roth IRA, your investment
options are limited to those offered by the current
custodian, unless you move the account.
However, you can always invest your 2007 contributions in a different account than prior year contributions. Establish this account with a custodian that offers the array of investments you want, including a money market mutual fund or money market account.
In general, your choices for a
custodian are banks, brokerages or mutual fund
companies. If you make your own investment decisions,
it makes sense to either open a brokerage account
with a discount broker or deal directly with a
no-load mutual fund family with funds that have
low annual-expense ratios. Exchange traded funds,
or ETFs, are an alternative to investing in mutual
funds.
You're on your own in deciding when to "pull the trigger." Trying to time the market is a hard thing to get right. Good luck.
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