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I just read the information on using the Foolish Four strategy in an IRA -

http://www.fool.com/money/allaboutiras/allaboutiras13.htm

Since there is a penalty for early withdrawals (aside from your original contribution) from a ROTH IRA, I am confused about the recommendation to:

"...buy the four stocks and hold them for a year. Then, a year and a day later, you check the guidelines to see if they are still underpriced. Those that are, you continue to hold; those that are not, you sell and use the proceeds to buy the new stocks that the approach identifies... Outside of an IRA, selling that frequently could cost you big bucks in capital gains taxes, but inside the IRA, your gains are free to compound year after year. The results can be startlingly impressive."

My question is: When you sell the stock, is that not considered a "withdrawal"? I assume that it is not, or this strategy would not be recommended. For it to be an acceptable practice, is it necessary to sell and immediately replace the sold stock with another?
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