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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (50154)	11/24/2012 8:21:21 PM
From: E_K_S	Respond to of 78728

Thanks for your thoughts on this. Yes it can get quite complicated but like any investment I/we research, we like to know all consequences. My goal is to just get the whole IRA over to the ROTH while trying to minimize the tax bite. I will have to do a bit more research. It would be interesting to get the view point of a true "value investor" and if one should even do a IRA to Roth conversion. I do find the "tax free" qualification intriguing after holding for the minimum five year period. However, I guess one could get the same treatment holding tax free bonds. EKS

To: Paul Senior who wrote (50154)	11/25/2012 12:53:41 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78728

OT: Roth/IRA conversions My fed/state tax rates are at the highest level. If you mean that you are in the top tax margin, IMHO there is a high risk that ROTH conversion will not be beneficial for you, unless you expect to be in top margin when you withdraw money too... Obviously, you know your situation better than any of us, so above is just FWIW. I did Roth conversion in a year when I was in low tax margin. I probably should have converted more. I was not planning to do any conversions this year, but I'll take a look. IMHO, there is never any guarantee that the fallen stocks will perform better than non-fallen stocks. If it was true, you should always sell the non-fallen stocks and buy the fallen ones. IMHO, you're just following a fallacy. Recharacterization is mostly a gimmick. The fact that someone rolls over 100K to ROTH and that 100K falls to 90K next year does not invalidate the rollover! 90K may run up to 150K next year. Sure this person can recharacterize and then roll over 90K in the new year. But there are issues: they will have to do a bunch of paperwork that will cost time and/or money, taxes may be higher in the new year, person may hit higher tax margin by doing additional 90K rollover in new year, holding period starts from zero, and so on. Most people expect higher taxes going forward, so Roth seems like a good plan. Most people ignore chances of (a) lower taxes with fewer exceptions (IMO unlikely, but this is being proposed quite a bit) (b) taxes on Roth (impossible?? I wouldn't say so.)