Roth IRA Investment Options

The process of Roth IRA investment could take any number of forms depending on which type of investor you are. If you want to steadily build your Roth IRA portfolio, there are several different options that you could use. Here are a few Roth IRA investment options for you to consider.

Risk-Averse Investors

One popular group of Roth IRA investors prefer not to take on much risk in their portfolios. If you do not like the idea of risk in your Roth IRA, there are a few different investments that you could use. One investment with a relatively low form of risk is a bond. You could choose to invest in corporate or government bonds with the funds from your Roth IRA. Government bonds carry with them very little risk. For example, you can invest in a 10 year treasury bond and bring in a nice return for your portfolio. The success of these bonds is tied directly to the success of the federal government. Therefore, unless you believe that the government will go under anytime soon, you should be fine with this investment.

Corporate bonds are another type of investment that you could choose for very low risk. With this type of investment, you will be considered a creditor to the company that issues the bond. Therefore, even if the company files for bankruptcy, there is a good chance that you will be able to get your money back. Check bond ratings with MorningStar and invest in bonds with ratings of "AAA" in order to provide you with the least amount of risk.

Risk Positive Investors

If you do not mind taking on some risk in order to grow your portfolio, there are many investments that you could choose. One of the most popular ways to invest the funds from a Roth IRA is to get involved in the stock market. By researching and purchasing individual stocks, you will provide yourself with a great opportunity for capital appreciation. If you choose the right company, you could potentially make a fantastic return on your investment.

Another option would be to get involved in the commodities market. By purchasing contracts on oil, gold, and other commodities, you can diversify your account away from the stock market and still bring in a potentially large return.

Risk Neutral Investors

Another group of Roth IRA investors includes those that take a neutral position when it comes to risk. One popular form of investment for this group is the mutual fund. Mutual funds provide you with a great way to expose yourself to the market while staying diversified at the same time. With a mutual fund, you will be pooling your resources together with thousands or millions of other investors. The fund manager will use this money to buy a large portfolio of diversified securities. Many times, they will purchase stocks, bonds, or other securities in order to bring in a return for the investors. Traditionally, mutual funds present you with minimal risk with slow and steady returns.

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