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Taxedout,

I'm a bit confused. If this is a self0directed IRA, then you shouldn't have any tax considerations until you retire and withdraw the money. I got the impression from your note that you think that the investment you choose for your IRA should be determined by your high tax bracket when, in fact, just the opposite is true. You don't pay short-term capital gains in an IRA and you won't be taxed at those high rates for the dividend income in the IRA. The only tax you'll have to pay on the IRA is the tax due when you start taking distributions. I hope I didn't misunderstand your question.

Now, on a nother note. As for the particular strategy, why not use both? On the one-hand, your first scenario had you picking high-yielding stocks with some growth potential. This sounds an awful lot like the Dow Dividend approach that we talk about so often. Also, as for the second option, investing in high-growth, that is the other part of our investment philosophy. Lining your portfolio with multi-billion dollar heavy-hitters that average 22% a year for the past 37 years and then adding some smaller cap growth stocks is a fine way to construct an equities portfolio.

Best of luck,

David
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