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Prepare for the Dip: Roth Conversion  Thumbnail

Prepare for the Dip: Roth Conversion

From time to time the entire market has substantial drops. On average since WWII, the S&P 500 has had a 40% drop from peak to trough roughly every 5 years. We have no idea when these drops will come and trying to time them is futile.

I would propose you have a path forward for when securities in your IRA drop in value that you believe are great long-term investments.

For example, let’s say that you own ABC stock, and it makes you $20,000 in your $100,000 portfolio.   The rest of your portfolio is going great and has appreciated to $110,000.  However, ABC has fallen on hard times and the stock is now valued at $12,000.

The dip is a great opportunity to convert your ABC stock to a Roth IRA.  When doing a Roth conversion you can pick the specific securities and shares that you would like to convert.

The best conversions are often surgical and precise.  Always be looking for ways to turn lemons into lemonade!

important information 

Information in this material is for general information only and not intended as investment, tax, or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.

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