Taxable/tax-advantaged allocations
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Subject Author Date
Taxable/tax-advantaged allocations Default User 10-29-2007
Posted by Default User on October 29, 2007, 7:20 pm

Back a week or so I posted about REITs and bonds. I mentioned at the
time that due to a late start in serious investing my amount of
tax-advantaged account space outside my 401(k) isn't very high. In
fact, my Roths comprise about 10% of that money.

I'm still trying to finalize my allocations. I'd mentioned upping the
bond portion of the 401(k) and reducing the bond portion in the outside
accounts. I could then use available Roth space for REITs. Someone
mentioned other types of investments that could go in the
tax-advantaged accounts, but there wasn't any follow-up on that as to
specifics.

For those that didn't see the previous thread, I'm 50, no dependents,
professionally employed at the same company for 26+ years, could retire
with full benefits in 2011, probably won't for at least 10 years.




Brian

--
If televison's a babysitter, the Internet is a drunk librarian who
won't shut up.
-- Dorothy Gambrell (http://catandgirl.com)


Posted by rick++ on October 30, 2007, 11:41 am
The trick is to avoid selling a taxable investment to balance asset
classes,
but if there has been a gain, there will be taxes.
You make future contributions to the underperforming asset class
to bring it into balance. Its sounds counterintuitive to invest in
underperformers. But you are going after the long term return
of class, not its short term.


Posted by Default User on October 30, 2007, 7:09 pm
rick++ wrote:

> The trick is to avoid selling a taxable investment to balance asset
> classes,
> but if there has been a gain, there will be taxes.
> You make future contributions to the underperforming asset class
> to bring it into balance. Its sounds counterintuitive to invest in
> underperformers. But you are going after the long term return
> of class, not its short term.

Yeah, I'm aware of that.



Brian

--
If televison's a babysitter, the Internet is a drunk librarian who
won't shut up.
-- Dorothy Gambrell (http://catandgirl.com)


Posted by Ron Peterson on October 30, 2007, 11:55 am
> Back a week or so I posted about REITs and bonds. I mentioned at the
> time that due to a late start in serious investing my amount of
> tax-advantaged account space outside my 401(k) isn't very high. In
> fact, my Roths comprise about 10% of that money.

Tax advantaged accounts are nice, but not necessary.

> I'm still trying to finalize my allocations. I'd mentioned upping the
> bond portion of the 401(k) and reducing the bond portion in the outside
> accounts. I could then use available Roth space for REITs. Someone
> mentioned other types of investments that could go in the
> tax-advantaged accounts, but there wasn't any follow-up on that as to
> specifics.

Stocks that grow at a steady rate should be in the taxable account,
because you don't need to sell them.

More speculative stocks that may suddenly shoot up or be acquired
should be in your tax advantaged accounts so that you won't have to
pay taxes on short termed gains.

--
Ron


Posted by Default User on October 30, 2007, 7:09 pm
Ron Peterson wrote:


> > Someone mentioned other types of investments that could go in the
> > tax-advantaged accounts, but there wasn't any follow-up on that as
> > to specifics.
>
> Stocks that grow at a steady rate should be in the taxable account,
> because you don't need to sell them.
>
> More speculative stocks that may suddenly shoot up or be acquired
> should be in your tax advantaged accounts so that you won't have to
> pay taxes on short termed gains.

I won't be buying any individual stocks. Everything in the brokerage
account(s) will be ETFs, mostly index ones where available. Hopefully,
all rebalancing will be accomplished with new money on a quarterly
basis.

With this in mind, is there anything that would be candidate other than
REITs or bonds? Some of the value ones will produce dividends, of
course.




Brian

--
If televison's a babysitter, the Internet is a drunk librarian who
won't shut up.
-- Dorothy Gambrell (http://catandgirl.com)


Similar ThreadsPosted
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