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> What is the IRA invested in? This may be one
> investment vehicle where you could invest it in
> Foolish Four stocks.

I believe that he is mainly using index funds. But an IRA brokerage account for a F4 sort of portfolio is not a bad idea. We're primarily trying to come up with tax-advantaged places to put money after 401(k) and IRA limits are reached. Typically, he has to stop contributing to his 401(k) in September/October (something along the lines of "highly compensated" employees cannot contribute a higher fraction of their income than the average employee).

> Dripping is a pretty slow process, so unless he
> started with a large intitial investment or invested
> large amounts monthly (several hundred dollars), it
> might not be the best vehicle for retirement funds
> at his age. Most drippers put in fairly small
> amounts ($10-$100/month), but if he wanted to pop in
> $300 or more each month, he could probably get a
> substantial amount saved up in 15 or so years (about
> retirement time). Also remember that in drips you
> pay short-term capital gains taxes on the dividends,
> even if they are reinvested.

He will be trying to contribute as much as he can to this ($1000/month or so beyond 401(k)). I had thought about DRiPs into low-dividend-yield companies using a Rule Breaker or Rule Maker screen. Maybe in addition to a F4 portfolio. If he were to go with F4, he's unsure about where to save the money while waiting to make his annual purchase. Also, is anyone aware of any Buffett-style buy-and-hold funds that would have low capital gains distributions (and low fees)? I'm not a big fan of non-index funds, but we're trying to minimize tax consequences.


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