You can reverse a ROTH conversion if your investment goes south.

If you convert an account in 2010, you'll have until Oct. 17, 2011, to "recharacterize" it back to traditional IRA status. So if the account tanks between now and then, you can use the recharacterization privilege to reverse the conversion and eliminate the tax hit. You're back to square one with no tax harm done.

You can hedge your ROTH bets by setting up multiple accounts.

Say you want to convert a large traditional IRA. Consider doing this by spreading the converted amount into two smaller Roth accounts. That way, you can follow different investment strategies in each account. Then if one of the accounts tanks, you can reverse the conversion for that account (and avoid the inflated conversion tax hit on that account) while leaving the better-performing account in tax-favored Roth status.

The tax laws related to IRA's and other retirement plans have become increasingly complex and are loaded with potential pit-falls. Always seek professional advice prior to making decisions that impact your retirement funds.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).