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Author: PosFCF Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 459235  
Subject: Re: OT-Roth question Date: 3/19/2013 2:47 PM
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GalinAZ

I have a Roth with a stock that shows a (for me) considerable loss. It was a takeover. I stopped the dividends from being reinvested as the stock is unlikely to ever make up the loss in increased price and I take the dividends in the Roth in cash.

Unfortunately, I have all too much experience with selections in a qualified account (IRAs) going south. What I have decided, and this is just sharing my own thoughts not rendering advice, is that the choice is always one of prioritizing opportunities.

By that I mean that if I would not put any new money into a particular investment, I have to rethink whether I want to keep existing money invested there. Since losses in a Roth usually have no part in the investment decision (i.e. usually I can't take them off of income or other capital gains), this boils down to the question: "Is this the highest and best use of my money today?" If I don't know the answer, then I consult with someone who can help me. If I do know the answer, and the answer is not only "No" but "Heck No!!", then for me it moves to the struggle of selling at a loss versus keeping and hoping. I have found that the field of investing is a barren field when it comes to hope as a strategy. I have also found that once I sell a dog of an investment, there is a burden lifted from my mind that I didn't even know I was carrying around.

So, to sum up, I would evaluate whether this company is worth new money. If it is not, then I'd get out of it and research other opportunities to employ that capital. If I am unsure of what to do and my confidence is shaken, I would consult with someone that I trust before doing anything. But hoping for the best is usually not a very fruitful deployment of capital.

Poz
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