Expert: Paul Henneman - 4/19/2006

Question
I'm a 17 year old junior in high school and i really want to get into investing. My teachers have told me all of things things about investing, but not how to do it.
I've been researching for awhile and it looks like to me the Roth IRA is what I want, but i had a few questions:

1. Is a Roth IRA a good idea for me when im only 17 or is there something better to do?

About Roth IRAs
2. Do you invest a max of $4,000 yearly, or a max of $4,000 and thats's it?

3. Where is a good place to go to get started setting up a Roth IRA?

Thanks for your help!

Answer
Kenyon,
  Thank you for your questions!

1. I believe that you have to be 18 to start your own investment accounts, but when you do turn  18, yes a ROTH IRA is the perfect place to start.

2. You can invest a maximum of $4,000 per year in a ROTH IRA, not $4,000 total.

3. You can start a ROTH IRA account with any trading organization. The problem you will have is that you must decide what you actually want to invest in. A ROTH IRA account is like a shell, it is the format that allows you to benefit from things like deducting your contributions from your taxes, and not paying any tax on the profits each year. But you must decide what you want to invest in. For example, any publicly traded stock or mutual fund could be invested in. This is the hard part and takes some research and skill to find the stocks or mutual funds you want to purchase in your ROTH IRA. YOu also have the ability to change what you hold at any time, so it is good to always monitor your investments to see that they continue to do well.

A good service that I like very much to buy and sell stocks and mutual funds, and offers the ability to set this up through a ROTH IRA account is www.FOLIOfn.com  Their fees to buy and sell stocks is the best available. www.scottrade.com offers better service, but has slightly higher fees.

Before you open your account, I would strongly suggest reading "Investing For Dummies". This book will give you a good, basic background of stock and mutual fund investing. Some websites that have good information are www.motleyfool.com, www.thestreet.com, www.morningstar.com  Some publications that may be of help are Forbes, Fortune, the Wall Street Journal, and The Economist. I do strongly recommend that you start with mutual funds, they are generally easier to pick than stocks. www.morningstar.com is perhaps the best online source of mutual fund information that I am aware of. The 'Investing for Dummies' will give you some additional information on what specifically a mutual fund is, and how to select a good one.

I hope this helps! Please do not hesitate to follow up with me if I can offer any additional information or if you would like me to go into more depth on any of the above,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
www.VEReports.com
www.VEInstitutional.com
www.ValuEngineView.com