Hi cfcf,
You can eliminate many of your questions by just
buying low cost index funds.
The first thing you need to do is pick the stock/bond
ratio that you can stick with through thick and thin.
If you are just starting, DCA or value average into
your funds with new money to keep them in
balance.
You can be a "lumper" or a "splitter" .....a la a
Target Retirement fund or take the "coffeehouse"
approach. I think either will do just fine over
the long term. The more aggressive among us
like to spice up things with REITs, and international
stock and bond exposure. But, IMHO, those only
add a little return at the margin over the long term.
Accumulation and Distribution are quite different.
Personally, I think you can put things on autopilot
during accumulation and not worry about it.
Distribution is harder, I think, because you need to
take care not to sell off you stock accounts in a down
year and you need to maximize income from your
bond funds.
As for tax-sheltered vs. taxable accounts, you need
to put tax efficient stock funds and tax deferred
bonds like I-bonds and EE bonds in your taxable.
Put assets like TIPS, small cap value, REITS, bond
funds and other tax inefficient investments into
your sheltered account.
When you are drawing down, rebalance annually
by selling your winners, if any.
Keep 3 years of withdrawal in cash to cushion
bad stock years and allow rebalancing during
the drawdown phase.
During accumulation, take advantage of company
matching in your 401k ......but don't overdo it.
I think taxes are likely to be a lot higher in the
future. After getting the company match, invest
in a ROTH up to the max and then put what
ever you can into a taxable account. Remember
that you will only be paying capital gains taxes
and tax on dividends at 15% max (if that holds up)
Cheers,
Charlie
