Last week’s answer

Last Week’s Trivia Answer: In 1933, my founder bought a snack shop from a French chef, getting with it the rights to a secret yeasty recipe. I crank out more than 5 million of my main product each day and produce nearly 2 billion a year. Based in North Carolina, I sell through my own stores and in supermarkets, convenience stores and other retail outlets. In 1997, pieces of me were added to the Smithsonian Institution’s National Museum of American History. Customers come running when my red neon “hot light” glows. My stock price has risen more than fourfold since I went public in 2000. Who am I? (Answer: Krispy Kreme Doughnuts)

Know the answer? Send it to us with Foolish Trivia on the top and you’ll be entered into a drawing for a nifty prize! Know the answer? Send it to us with Foolish Trivia on the top and you’ll be entered into a drawing for a nifty prize! The address is Motley Fool, Box 19529, Alexandria, Va. 22320-0529. Send questions for Ask the Fool, Dumbest (or Smartest) Investments (up to 100 words), and your Trivia entries to Fool@fool.com.

Electronic arts is in the game

Joystick jockeys and die-hard gamers aren’t letting Electronic Arts (Nasdaq: ERTS) down. The video game king’s revenue hit $833 million in the third quarter, 30 percent more than a year ago.

Harry Potter, whose quest for the Sorcerer’s Stone won over movie audiences during the holidays, helped the California-based game publisher move 7 million units, which Electronic Arts released in most of the major gaming formats. Also leading the way was the successful early release of Final Fantasy X.

The strong results hint at better things to come. For starters, while console fans are still buzzing over November’s debut of Nintendo’s GameCube and Microsoft’s Xbox, new systems typically don’t peak in software sales until the third and fourth year of their product cycle. If Microsoft and reigning champ Sony mark down their $299 consoles to the $199 GameCube price point later this year, as expected, that only will fuel faster consumer acceptance.

Online, EA.com is the most ambitious trial balloon yet in gauging whether video game addicts are willing to pay for Internet gameplay. The subsidiary’s revenue nearly doubled to $21.9 million for the quarter, and the company expects profitability in the fiscal year that starts in April.

It’s how you play the game that dictates whether you win or lose.

Right now, Electronic Arts seems like a winner worth watching.

God, stocks and paper clips

This is both a dumb and smart investment. I bought shares of Tricon Global Restaurants (NYSE: YUM) at about $30 each. When they reached $41.75, I tried to sell, but my computer froze. It took a while, but I fixed the malfunction with a paper clip. I then entered a market order to sell my shares. While I was applying the paper-clip remedy, the stock had soared to $46.75! I bragged to my wife that God was blessing me because I had anonymously given $100 to a family that was out of groceries. The next day, the shares popped up to $51.80. My wife said, “If God liked you, He would have given your computer a cramp for another day or two.” Wesley D. Tracy, Kansas City, Mo.

The Fool Responds: Very funny! Don’t think too hard about this incident, though. In the short term, stock prices of good and bad companies can jump up or down seemingly randomly. It’s the long term that counts and over the long haul, stock in solid companies should appreciate.

Tax advantaged accounts

How can I take a tax loss on a Roth IRA? K.A., Pisgah Forest, N.C.

For the most part, you can’t.

That’s part of the deal with tax-advantaged accounts. They offer their advantages only if you accept some restrictions, rules and trade-offs. Under very limited and unusual circumstances, a loss in Roth IRA might be deductible as a miscellaneous itemized deduction. If you’ve closed all of your Roth IRA accounts, you may qualify for this limited exception to the general rule. Ask a tax pro about this.

You can learn more about IRAs at www.Fool.com/ira/ira.htm and www.rothira.com.

In the current economy, would it be better to invest in bonds or Treasury bills with less risk than stocks? Michael P., via e-mail

First, consider your time horizon. If you’ll need the money you’re investing within five years (or 10, to be more conservative), it shouldn’t be in stocks. The stock market can move in any direction in the short run, but over long periods it tends to go up. Short-term money should parked in less volatile places, such as money market funds, CDs and bonds. (Learn more about short-term savings at www.Fool.com/savings/savings.htm.)

Next, consider your risk tolerance.

Understand that many stocks can zip up and down markedly in value in a short period. If you’re planning to hang on for the long term and can stomach such moves, fine. If not, consider less volatile, slower-growing investments.

Finally, don’t let a slumping economy scare you away. When the stock market is down it’s usually a good time to buy it’s when good offerings are on sale. Just be sure you’ve taken the time to think through what you’re doing and are comfortable with your plan.

Estate planning

Fail to learn anything about estate planning, and you may end up costing your loved ones much money, heartache and aggravation one day. Here are just a few things to know:

Probate is the legal process of administering an estate. Among other things, it involves demonstrating that a will is valid, cataloging the belongings of the deceased, getting the belongings appraised, distributing the property, paying debts and taxes, and transferring titles.

Probate is a hassle, often costing between 5 percent and 10 percent of an estate’s value. Also, property remains in limbo while in probate, which can last months or even years.

Although probate has some good points, such as being a fairly unbiased system, in most cases it’s best avoided. And it can be avoided, if you plan ahead.

One way to avoid probate is through a living trust or a life estate trust, where you formally transfer the title of various properties to your heirs before you die. You retain control over them while you’re alive, but they technically belong to the trust. When you die, a trustee passes the property on to your specified heirs. This tends to be a fairly quick and simple process.

Other options include “payable on death” designations on bank accounts (where the contents of the account pass immediately to the designated beneficiary on your death) and retirement accounts such as IRAs and 401(k)s (where you also specify beneficiaries). Most states now permit securities held by the likes of brokerages to pass to beneficiaries without going through probate.

Many states permit a certain amount of property to be inherited without going through probate.

Don’t die “intestate” without leaving behind a will or trust. In such cases, the government takes over and follows strict procedures, dividing your property according to formulas. Your estate may end up in probate for years, while your heirs sue each other. Yuck!

To learn more, read up and then consult a professional. Visit www.estateplanninglinks.com, or read “The Complete Idiot’s Guide to Wills and Estates” by Stephen M. Maple (Alpha Books, $16.95).