haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I am trying to think through my philosophy on investments in the various accounts of TIRA, Roth, and taxable. 80% of my investments are taxable. It's mainly the Roth and TIRA that I am not sure I have a good handle on. My Roth philosophy is that I want only high probability bets in an established Roth. I really don't want that money on which I have previously elected to pay tax disappear. So to me, high quality, high probability payers of growing and well covered dividends are about perfect. Likewise, TIPS at good real rates, or even fixed treasuries when they appear to compensate for inflation risk- which IMO they do not at present
OTOH, during the period of allowed recharacterization I think the Roth conversion offers other possibilities. A somewhat less secure investment with a good risk reward ratio might be fine, as one can always re-characterize it if it has lost signigficant money. So in a way, this is the same as losing money in a TIRA or 401k.
TIRA? I don't really know. I sometimes hate to buy stocks in one, knowing that I will eventually cash out the gains at ordinary income rates. But I know that there is at least one very successful investor on this board who lives from the withdrawals from tax-deferred accounts invested entirely in equities. So when returns on fixed income are relatively bad, as they are now, I consider equities which are not obviously overpriced for my tax-deferred account (TIRA).
I would like any comments or ideas that people might have on this general area.
Ha
OTOH, during the period of allowed recharacterization I think the Roth conversion offers other possibilities. A somewhat less secure investment with a good risk reward ratio might be fine, as one can always re-characterize it if it has lost signigficant money. So in a way, this is the same as losing money in a TIRA or 401k.
TIRA? I don't really know. I sometimes hate to buy stocks in one, knowing that I will eventually cash out the gains at ordinary income rates. But I know that there is at least one very successful investor on this board who lives from the withdrawals from tax-deferred accounts invested entirely in equities. So when returns on fixed income are relatively bad, as they are now, I consider equities which are not obviously overpriced for my tax-deferred account (TIRA).
I would like any comments or ideas that people might have on this general area.
Ha