What the best type investment to buy in a Roth IRA?
The fact that you’re buying an investment in a Roth IRA should not blind you to the fact that this is an investment like any other. It should be viewed as part of your overall portfolio. That said, any tax-sheltered account like a Roth is a great place for an investment that generates dividends or capital gains distributions each year. If those are in a taxable account, you pay taxes on those earning each year — but in your IRA, you don’t. If this is your first retirement investment, then you should probably go with a broad-based stock fund. You might consider an index fund from Vanguard – it’s the cheapest way to invest if you don’t know much.
