[sweeps]

parafly, I was surprised to see you say $4,000 was not enough. Most new investors are concerned by the minimum investment. That's great. Fund the Roth to the max, and then look into other taxable investments.

Here's some good news: You can still open and fund your Roth for 2005 until April 17 (assuming you had earned income in 2005). If you do that you can effectively put $8000 in your IRA this year.

The Roth IRA is really just a "wrapper" for whatever investments you want. Usually you buy stock and bond mutual funds, but you can pretty much invest in whatever you want. The investments grow as they earn capital gains and dividends. But, as you mentioned, the investments can shrink in value as well -- that's why it's important to stay well-diversified (for example, look at Vanguard's 2035 Target Retirement Fund).