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Author: bryanharvey Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: foolish investing IRA Date: 1/19/2000 5:34 PM
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In the past I have always put my annual Roth IRA contribution in an S&P index fund and then with my other savings I buy individual stocks. I'm betting my individual stock portfolio will beat the S&P over time(a la Foolish 4). Therefore, wouldn't it be wiser to buy the individual stocks under a Roth account and buy the index fund outside of the IRA? This way I reap maximum benefit of the tax-free Roth status when I retire.



Then on second thought, why even bother with a S&P index fund at all?



Thanks for your feedback in advance!

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18005 of 76418
Subject: Re: foolish investing IRA Date: 1/19/2000 5:48 PM
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As you become more experienced with investing, and as your funds become somewhat larger, you may very well want to switch from an S&P Index fund to other stocks. Foolish Four is certainly an excellent portfolio. Long term buy and hold is probably the better strategy long term--especially for a taxable investment.

Yes, Foolish Four involves annual adjustments in your holdings and these transactions can incur capital gains taxes. Therefore, FF is best in a tax protected vehicle such as a Roth IRA. S&P Index funds are relatively more tax efficient, so between the two, it would be better in a taxable account.

Of course in the end, your Roth will incur no taxes, while the others will at least incur capital gains. So the account with the greatest value at retirement could be the one you most want to be in the Roth. It depends. You will have to decide for yourself in your case with your expected rates of return.

Best of luck to you.

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Author: 1Vagabond One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18031 of 76418
Subject: Re: foolish investing IRA Date: 1/20/2000 1:07 PM
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bryanharvey.....
Now that seems like to much Foolish thinking!!!!

Fool On
Vagabond

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Author: bryanharvey Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18040 of 76418
Subject: Re: foolish investing IRA Date: 1/20/2000 6:53 PM
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Thanks for you confirming what I thought was the best thing to do!

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