Keep Putting Money In My Roth?

[Matth3w]

My question is, my Roth IRA has been taking a dump ever since this supposed "recession" was started by the media. Since about December time frame my Roth has gone from about $29 a share to less than $23 per share. Now I know that the Roth is a long term investment and you can't look at the short term, but I was wondering...is buying shares of your Roth when the market is low like buying regular stock when the market is low? I'm not too financially savvy so I'm not sure if I'm asking that question the right way...in other words, when the market goes back up, are my Roth contributions going to be worth MORE or it doesn't matter?

For example, if the market bottoms out and I buy Pepsi stock at $1 a share instead of the usual $10 a share (just making it up), when the market eventually booms again I will make a lot of money because I was able to buy more shares at a lower price. So if I had $100 I was able to buy 100 shares instead of 10 when the market was down. Does the same hold true for the Roth IRAs?

I'm trying to pay off some debt from my fiance's engagement ring and I just want to know if the money I am contributing to my Roth at the moment is worth it to keep contributing or stop until the market gets better and use that money to pay off the credit card.

[fruitbowlk]

Buy low
Sell high.

[Matth3w]

So the same applies to Roths as well? Once the market goes up I should see a significant increase?

[asmom]

So the same applies to Roths as well? Once the market goes up I should see a significant increase?

Yes. If the price of shares in your Roth go up (not guaranteed), then you will see an increase in the value of your fund.

[Matth3w]

Great, I guess I'll just keep putting in then.

[jimstolz76]

I'm not financially savvy either, but look up "dollar cost averaging." That is what you're describing.

[buzz]

When your shares return to the $29 level, the ones you owned since December will have broken even. The shares you buy now will have made about a 20% gain. Buying when the market is down can be a great moneymaker.

What, exactly, are you invested in?

[disneysteve]

I agree with the others. When you are young (which I'm assuming you are), market downturns can be your best friend, though you may not realize it at the time.

Would you rather buy shares at $23 or $29? Certainly it is better to buy them at the lower price. Just like going to the mall for a big sale. Stocks and stock mutual funds are currently on sale. Of course, not all will recover to their previous prices, so you can't just go out and buy anything, but if you are well diversified, you should see nice gains over time when the market recovers.

It sounds like you only own one fund. What is it?

[nextel500]

Yes, I would max it out every year. A Roth IRA is a very good tool for the future especially since one can take money out whenever they want, certain restrictions apply of course.

[poundwise]

Step one: Put money in
Step two: Don't watch the stock ticker
Step three: Repeat