Roth IRA help - What type of funds to invest in for someone who knows little about investing??

I am a Vanguard fan myself. If u r just starting out I would recommend their Star fund - which invests in a number of their other funds - it is well diversified with Large, small & foreign stocks & several bond funds. I put my daughters in that fund when they started their Roth.

Then try reading up - I suggest The Bogleheads Guide to Investing by Taylor Larimore (and others) - it is written for regular people. Also, check out their web site: http://diehards.org - just read the to what others ask & u will see that they r very kind to people starting out who might have ''dumb'' questions.

As u get more money & experience u will want to move out of the Star fund into several index funds.

You can do it. It really is not rocket science. There r a lot in the media that what to make it confusing but a few simple index funds can give u a diverse, low cost portfolio & u do not have to do a lot of trading - every year or so rebalance to ur original plan.

You have already picked excellent fund companies. Of the three u mentioned, Fidelity & Vanguard have an enormous variety of mutual funds to choose from (T.Rowe Price has excellent funds, but far fewer in variety.) Also, Vanguard has been & continues to be the fund company with the lowest fees overall, although Fidelity is certainly trying to compete hard there as well.

Since IRA money is for ur retirement, & thus for the long-term, u should not be too conservative with it (no CDs, for example). This argues for a high % of stocks or even 100% stock fund (depending on any other investments u may have, that u did not mention).

Shana is suggestion of one of the target retirement funds is fine. These do tend to be quite conservative but the percentage allocated to stocks drops over time (as u near retirement, which is advisable). The Fidelity & the Vanguard target retirement funds differ in their percentage of stocks for a given retirement date, but r very similar.

But if u have no other stock investments, u could easily go for an S&P 500 index fund, which invests ur money in 500 of the biggest US companies. (And thus is well-diversified among US companies.) Alternatively, look for a 'total market index fund'. Both Fidelity & Vanguard have both of these types of funds.

Whichever u pick, do not judge it by any short-term fluctuations. The market fluctuates, & the ups & downs r important to short-term traders, but considerably less important for ur long-term needs.

I know Fidelity (and probably the others too) has funds that are named by the year that you plan to retire (so you'd pick fund for the year 2040) that will automatically redistribute your money to be more aggressive when you're younger and more conservative and safer as you age. They mix it up b/w stocks, bonds, and cash for you.