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"I have a current paper loss of about 22% in Vanguard Index 500 (VFINX). This account is a traditional IRA.

What are the advantages and disadvantages of selling now? This account represents about 9% of my total portfolio.

Are there other vechicles where I can gain 22% faster than the S&P 500? I don't know if that's a reasonable assesment."


Well, Eric, I'm no investment pro, but if the contributions to your traditional IRA were deductible, then all dollars you take out when you retire ( both original contributions and earnings ) are taxed at your then prevailing rate.

So, I think there is no tax advantage to selling a loser in a traditional IRA, except that it frees up dollars to be reinvested through your IRA in , hopefully, winners.

By the way, IMHO, if you have taxable interest investments ( versus dividends ), they are better off in your IRA. Conversely, dividend generating investments are now better off in your taxable accounts, since they are only taxed at 15%.

The type of stock and other investments you should consider depends upon age until retirement and many other factors.

Hope this helps!

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