Individual Stock in Roth IRA

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ny_rn
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Individual Stock in Roth IRA

Post by ny_rn » Wed Dec 04, 2019 5:16 pm

Currently, I am 100% Vanguard Total Stock Market across my 403b, rIRA and taxable account and I'm approximately 25-years away from "retirement." My current portfolio has zero individual stocks, but I am considering investing (or should I say speculating) $6,000 in a single company within my rIRA in 2020. I would like to take whatever tax-free gains from the individual stock and place them in Vanguard Total Stock Market at some point.

Has this worked out for anyone? Good or bad?

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RickBoglehead
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Re: Individual Stock in Roth IRA

Post by RickBoglehead » Wed Dec 04, 2019 5:21 pm

Individual stocks don't beat indices as an approach.

What does "worked out" mean?
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sport
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Re: Individual Stock in Roth IRA

Post by sport » Wed Dec 04, 2019 5:23 pm

ny_rn wrote:
Wed Dec 04, 2019 5:16 pm
Currently, I am 100% Vanguard Total Stock Market across my 403b, rIRA and taxable account and I'm approximately 25-years away from "retirement." My current portfolio has zero individual stocks, but I am considering investing (or should I say speculating) $6,000 in a single company within my rIRA in 2020. I would like to take whatever tax-free gains from the individual stock and place them in Vanguard Total Stock Market at some point.

Has this worked out for anyone? Good or bad?
How lucky are you ? Very lucky = good. Not so lucky = not so good.
I had one stock in my portfolio left over from years ago. It was GE. Nuff said?

02nz
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Re: Individual Stock in Roth IRA

Post by 02nz » Wed Dec 04, 2019 5:26 pm

Gambling (because that's what it is) on an individual stock with one's retirement money is not a good idea. Has it worked out for some? No doubt. But not for others, including a close family member of mine.

If you want to have some play money, set a dollar limit and don't go over it. I wouldn't do it in my IRA, Roth or traditional - that's not play money.

Topic Author
ny_rn
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Re: Individual Stock in Roth IRA

Post by ny_rn » Wed Dec 04, 2019 5:27 pm

I know this is totally against the Boglehead theory to which I subscribe to. I guess I just need someone to tell me no, no, no.

dbr
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Re: Individual Stock in Roth IRA

Post by dbr » Wed Dec 04, 2019 5:30 pm

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Last edited by dbr on Wed Dec 04, 2019 5:49 pm, edited 1 time in total.

MotoTrojan
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Re: Individual Stock in Roth IRA

Post by MotoTrojan » Wed Dec 04, 2019 5:31 pm

ny_rn wrote:
Wed Dec 04, 2019 5:27 pm
I know this is totally against the Boglehead theory to which I subscribe to. I guess I just need someone to tell me no, no, no.
It’s not an unreasonable move with a small portion of your portfolio. In some ways an IRA is the ideal playground for trading, with the only cons being limited space and no ability to write off losses.

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1789
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Re: Individual Stock in Roth IRA

Post by 1789 » Wed Dec 04, 2019 5:49 pm

It can work out 3-4 years but you will never know when is the right time to pull that money out. The only way this can work out is to find next APPLE or MSFT which is impossible. It will certainly fail for 25-30 year time periods. I would continue 100% VTSAX if i were you. You already have the best fund there.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

illumination
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Re: Individual Stock in Roth IRA

Post by illumination » Wed Dec 04, 2019 5:53 pm

Can you afford to lose $6,000 and all the gains that could go with it for 25 years? For some people, the answer is yes, so it's just not a big deal, they have plenty for a comfortable retirement anyway.

If say you got a 7% rate of return on $6,000 over 25 years, that's $34,352 tax free. And many aren't going to pull it all out in 25 years, it could easily be closer to 35 years when you are deeper into retirement. Then it becomes over $69,000.
https://www.moneycalculator.org/CompoundInterest/


I'm more of the state of mind that I would rather do an individual stock in a taxable account than a Roth. If it doesn't work out, you have the loss to write off. Usually a high reward type stock has higher risk. You're not going to get Netflix type returns buying a stock like Procter and Gamble. I also think Roth dollars are "worth" more so I would rather not gamble with them. And capital gains rates are pretty favorable anyway.

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arcticpineapplecorp.
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Re: Individual Stock in Roth IRA

Post by arcticpineapplecorp. » Wed Dec 04, 2019 5:57 pm

ny_rn wrote:
Wed Dec 04, 2019 5:27 pm
I know this is totally against the Boglehead theory to which I subscribe to. I guess I just need someone to tell me no, no, no.
okay.

no, no, no.

mic drop.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

retired@50
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Re: Individual Stock in Roth IRA

Post by retired@50 » Wed Dec 04, 2019 6:24 pm

ny_rn wrote:
Wed Dec 04, 2019 5:16 pm

Has this worked out for anyone? Good or bad?
I'm sure it has worked out good for some, and bad for more, the trouble is, they may not be posters in this forum.

Statistically speaking, buy the index fund the better angels are telling you to buy.

Regards,

Topic Author
ny_rn
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Re: Individual Stock in Roth IRA

Post by ny_rn » Wed Dec 04, 2019 6:31 pm

It looks like I’ll stick with contributing $6k into VTSAX and have a beer. I can always count on you all to talk me off the ledge. :beer

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