Dollar cost averaging into mutual funds

[Dinadur]

Question for all you financial gurus out there...

I would like to set up a Roth IRA that I can dollar cost average into a set portfolio of mutual funds (similar to a 401k) is this possible without buying a variable annuity? (My current Roth IRA is with Fidelity)

[Broken Arrow]

I'm not a guru, but the short answer is yes, you can typically dollar cost average mutual fund purchases, and it doesn't have to be annuities either. However, depending on the brokerage, there may be a minimum balance and/or fees required to get in and keep it maintained.

[buzz]

1-800-FIDELITY

They don't bite.

[Dinadur]

1-800-FIDELITY

They don't bite.

Well I know that I could call them but the lazy side of me was hoping someone would have experience in this matter. The HR at my company is run through Fidelity and some of my coworkers have had less than favorable experiences with their customer service.

[yellow heel]

I have roth ira through fidelity and vanguard.

You can set it up online and transfer money electronically (automatically) every week, month, quarter, year whatever you like.

Very easy. If you want to do only index funds, I will go with vanguard.

[safari]

I had to call Fidelity's customer service several times, and they've always been very helpful and knowledgeable. I am pretty sure that you can dollar-cost-average by investing a set amount into your mutual funds, just check what the minimum amount is for each fund because it varies. You can set up an automatic investment plan, so it electronically debits the money from your checking/saving account every month and buys mutual fund shares. You have to make sure that you don't go over the maximum contribution limit and cancel the automatic investments before that happens.

[skydivingchic]

Yes you can do this. My Roth IRA is with T Rowe Price. Most of their initial investment minimums are $1000 for IRAs. For the systematic purchases, most minimums are $50. T Rowe Price automatically takes money from my checking account each month for my Roth. I'm sure the other companines like Vanguard and Fidelity offer similar setups, but their minimums may be different.

[jIM_Ohio]

My Roth is with T Rowe. They waive fund minimums if you commit to DCA into mutual fund with automatic monthly debits from a checking account.

I assume Fidelity has a similar program.

DCA is a technique. You can do it with stocks, mutual funds, bonds, CDs and most other investments (even variable annuities).

[safari]

My Roth is with T Rowe. They waive fund minimums if you commit to DCA into mutual fund with automatic monthly debits from a checking account.

I assume Fidelity has a similar program.

DCA is a technique. You can do it with stocks, mutual funds, bonds, CDs and most other investments (even variable annuities).

I wouldn't recommend DCA for stocks if you can only invest a small amount every month. The broker fees are going to kill you.

[Dinadur]

I wouldn't recommend DCA for stocks if you can only invest a small amount every month. The broker fees are going to kill you.

You are right about that... but with no load mutual funds will I not be subject to a fee?

[safari]

You are right about that... but with no load mutual funds will I not be subject to a fee?

Fidelity offers a lot of mutual funds with no transaction fees, including many non-Fidelity funds through their Funds Network. You will have to hold the funds purchased through the Funds Network for at least 180 days in order to avoid the short term trading fee.

[Hypersion]

Both Vanguard (e-statements) and Fidelity are no-fee nowadays. I have accounts with both companies.

[money2008]

I wouldn't recommend DCA for stocks if you can only invest a small amount every month. The broker fees are going to kill you.

If you go for zecco.com, there is no commission for 10 transactions every month. This may be an option for DCA on stocks. Your account value should be at least 2500$.