Midpack
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Discussed many times, but for those who believe a picture is worth a thousand words (yours truly), this says it all...from arguably one of the best investing resources online. Principles of Tax-Efficient Fund Placement - Bogleheads. Something I consider every time I invest in a new asset (and has determined my AA to some extent).
Apologies if this has been shared in the past, I don't remember seeing it here at least in the past few years...
Apologies if this has been shared in the past, I don't remember seeing it here at least in the past few years...
General strategy
- Choose your basic asset allocation (stocks/bonds/cash) before worrying about taxes.
- If possible, put your most tax-inefficient funds in your tax-advantaged accounts (IRA, Roth IRA, 401(k), 403(b), etc.).
- If you would have to hold a tax-inefficient fund in a taxable account, consider a more tax-efficient alternative, such as a stock index fund rather than an active fund.