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Subject:  Re: New IRA Date:  1/31/2005  7:39 AM
Author:  IndecisiveFool Number:  44315 of 88520

Personally I am not in favor of individual stocks in tax advantaged accounts. I would suggest broad based mutual funds and especially index funds for these accounts.

Why? The only big disadvantage I see is that you can write off losses against any gains or your income taxes. The advantage of individual stocks in tax advantaged accounts is that you don't have to worry about taxes on large gains (Roth) or long versus short term tax rates. An index fund is generally tax efficient so it seems to me to make more sense to invest in an index outside the tax advantaged account rather than inside it.

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