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I am 31 year novice investor, and have been putting away money into a 401K through my employer since I started work. I don't have as much saved as some, but it is what is and I think I am on a pretty good track. Anyway, from the half dozen of limited choices offered I have been putting money into index funds via the employer plan and was curious if there is a better way. Right now I am in a Vanguard 2045 plan (supposedly one of these funds which changes allocation as time goes on). Its return has been decent.

I have been part of the "Stock Advisor" for the last year now and have seen some pretty good returns so far for the stocks I have chosen with the help of the Fools of course.

I have been comparing these returns to the vanguard fund which almost exactly tracks the S&P and have been wondering if there is a way to invest in individual stocks through an IRA?

Am I trying to have my cake and eat it too? Am I forgetting about the ups and downs of the market and the work it would take to track individual stocks through an IRA? Does the tax shelter and "free" money from the employeer make this decision a no brainer? Why wouldn't an investor invest in individual stocks for 30 yrs getting a higher return and then taking a tax hit later? Does the tax hit take so much out of your return that it becomes a wash?

I appreciate your patience in answering my uneducated questions.


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