Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: Silencer2480 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19222  
Subject: What type of stocks to put in IRA's? Date: 8/1/2000 3:27 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Just wondering what everyone thinks about this one. Say I have $2000 in a Roth IRA and $2000 in a regular online brokerage account. Do you think it's more Foolish to have my "stodgier" investments (index funds, blue chips) in the IRA or in the taxable account? And vice versa for the higher risk companies (CSCO, INTC, ISLD... all things internet).

Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4672 of 19222
Subject: Re: What type of stocks to put in IRA's? Date: 8/1/2000 3:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Greetings, Silencer2480, and welcome. You asked:

<<Just wondering what everyone thinks about this one. Say I have $2000 in a Roth IRA and $2000 in a regular online brokerage account. Do you think it's more Foolish to have my "stodgier" investments (index funds, blue chips) in the IRA or in the taxable account? And vice versa for the higher risk companies (CSCO, INTC, ISLD... all things internet).>>

That's your choice based on which investments you expect to generate the highest income taxes. The higher the income taxes you anticipate paying, the better the argument for keeping those investments in the Roth. That would be true regardless of whether the gain results in a capital gains rate maximum of 20% or not. The objective would be to pay the least dollars to the tax man.

Your blue chips would probably appreciate at market rates and have some dividends taxed at ordinary rates. Your techs could appreciate at fantastic rates ultimately taxable at no higher than 20%. In the Roth you pay no taxes, so the taxable account should be used for the investment on which you expect to be taxed the least.

Regards..Pixy

Print the post Back To Top
Author: GJRobinson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4683 of 19222
Subject: Re: What type of stocks to put in IRA's? Date: 8/2/2000 10:42 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0

It's a tough choice. If you anticipate that you will have large gains,its better to keep the stocks with bigger growth potential in the Roth account so that you avoid tax on the gain, leaving the more conservative stocks in the taxable account. On the other hand, if you want to be able to use losses to offset gains, you would keep the high flyers in the taxable account on the theory that losses are more likely on the high flyers. A little of both may be a sensible solution.

Hope this helps.



Print the post Back To Top
Author: mschorer One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4684 of 19222
Subject: Re: What type of stocks to put in IRA's? Date: 8/2/2000 10:48 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Ha! Timing is everything! For many years I though I was so clever: I kept income earning investments in my IRA and my appreciating equities in my taxable accounts. Now, retiring, I must sell the equities and switch to income-producing vehicles in the taxable accounts (and Cap Gains raises its ugly head).

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement