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[[I'm new to this investment game and the advice from the Motley fools seems solid in theory. My
question(s)are: who has the 10 grand to shell out to buy 4 of the top 10 performers on the DJIA? I
sure don't! and by investing in mutual funds and a Roth IRA and my 401(k)I can give a little each
month...the big boys of the Dow can cost $100 a share...]]

Perhaps you can't get there all at once. But sooner or later you'll get there. You might want to spend some additional time in the F4 area in order to interact with others who have saved enough to participate in the F4 program. And...it doesn't take $10k to get your feet wet.

[[ 2nd question...mutual funds are tax shelters and I'm combining before and after tax (401 and Roth
IRA) investments.]]

Mutual funds are tax shelters? I certainly don't agree with this statement. If you purchase mutual funds via your pre-tax 401k plan, it is the 401k plan that shelters your taxes...not the mutual funds that you purchase. You are just limited in your investments to the mutual funds provided by the 401k plan administrator.

Mutual funds are no more a tax shelter than any other investment. In fact, because of the annual distributions required to be made by mutual funds, many mutual funds are actually tax hazzards.

[[ If you buy lots of stock on the DJIA and then 1 yea later (per the brothers'
advice) sell shares in 1 company to grab a higher performing one..you get taxed to DEATH!]]

Taxed to death? With a maximum tax of only 20%? I wouldn't call that "taxed to death". Plus the fact that your mutual fund distributions, much (if not all) is a short term gain, will be taxed at ordinary income rates (could be as high as 39.6%). So I would much rather trade a 20% tax rate (on gains historically GREATER than the vast majority of mutual funds) than 39.6% rate on crappy returns. But hey...that's just me.

[[ it
doesn't seem like the Lead Fools take that into consideration when talkign about yield....]]

But check out your mutual fund. Do THEY take tax issues into account whey THEY speak about yield? Nope. And neither does any other investment. The yield that they advertise is a pre-tax yield. That's really all anybody can advertise, since each persons tax issues are completely different.

But this entire issues has been discussed and re-discussed in the F-4 area. You might want to go over there and check it out and ask some other Fools in that area for some additional guidance.

TMF Taxes
Roy

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