As a journalist, I’m constantly translating news into investment strategies that I both implement myself and share with readers. In addition to those two factors, however, the decision to implement a tax-efficient investment plan to minimize taxes has proven to provide a significantly larger nest egg. While devising an investment plan, establishing a reasonable asset allocation based on your risk tolerance, objectives, and timeline is probably the single most investment decision you can make. That is, such decisions should not be made in a vacuum and instead the optimal asset allocation and asset location decisions should be made jointly. That is certainly a helpful graphic to refer to when making asset location decisions. Security selection to minimize fees and optimize returns while fulfilling a particular asset class also is vital in your investment well-being. For a more simplified description of the above including various investment choices, one can consult the Bogleheads wiki article on this topic.

In 2016 I was fortunate to be invited to write a guest post for Monevator following the publication of my latest book ‘DIY Simple Investing’ and a link in the article has boosted the views. He doesn’t mind holding if growth is strong, even if the stock looks wildly overvalued on many value investing metrics (such as P/E ratio or P/BookValue.) He is following a similar investment scheme with Amazon, which I will discuss below. Jaconetti, Colleen. “Asset Location for Taxable Investors,” Vanguard Investment Counseling & Research. Spiegelman, Rande. “Location, Location, Location: Dividing Your Portfolio between Taxable and Tax-Advantaged Accounts,” Schwab Center for Investment Research. Dammon, Poterba, Spatt, and Zhang from CMU, MIT, CMU, and UT-Dallas reached the same conclusion as the Vanguard report utilizing arbitrage arguments in their 2004 TIAA-CREF Paul A. Samuelson Award-winning paper, which they discuss in a research dialogue. To get back to the main point of the post, Reichenstein holds somewhat of a morphed view of the Schwab report and TIAA-CREF award-winning paper above.

0.7861. A sharp drop in prices of iron ore, Australia’s main export commodity, has weighed on the Aussie. Near the beginning, Malkiel posits the two main theories and approaches to asset evalution: the firm-foundation theory and the castle-in-the-air theory. The main reason is practical: channels with parallel lines at the top and bottom are rarer than trend lines because both sides need multiple hits. One doesn’t need to read the text from page 1 to page 464 in order to gain great insight. • Do You Need Easier Reimbursements? In yet another paper published in February 2006, “Trends and Issues: Tax-Efficient Saving and Investing,” Reichenstein highlights a few key points. Reichenstein, William. “Tax Efficient Saving and Investing,” TIAA-CREF Institute Trends and Issues. Reichenstein, William. “Asset Allocation and Asset Location Decisions Revisited,” The Journal of Wealth Management. He also concludes that if one absolutely insists on holding bonds in taxable accounts, then one should adjust his or her asset allocation to have a relatively large bond holding. This implies that even actively-managed mutual funds that generate large capital gains (losses) each year should be held in taxable accounts and bonds in tax-deferred accounts. In the end, after ten years, Scenario 1 in which the investor utilizes tax-efficient index funds in taxable accounts and taxable bonds in tax-deferred performed the best after taking taxes into consideration.

While it’s true that most of the “best” domain names were snatched up in the 1990’s, many domains are still purchased and then “flipped” for many times the value of the original investment. There is still some debate in investment circles about this approach, though, and many state that investments don’t care where they are housed and thus calculating asset allocation percentages by adjusting for taxes is unnecessary. 1. Choose your basic asset allocation (stocks/bonds/cash) before worrying about taxes. The location of your investments is vital to minimize taxes and maximize your after-tax portfolio return. If you are looking at portfolio of mutual fund schemes to invest, that is strategically structured based on the core and satellite approach to investing. The effect of taxes on one’s portfolio should not be understated and one must consider the tax-efficiency of their investments when considering asset location. I can assure you that you won’t be sorry for considering tax-efficiency in your investment plan. Mutual funds are often set up to invest in a specific market sector or type of investment.

You can find many publications on the value of antique clocks but these never seem to be current and never take into consideration regional variations, they mostly only cover the top end of the market which are high value pieces. This is yet another reason to hold index funds – you know what you are getting and can manage it in a way to confidently minimize taxes. There’s a reason that the book has been repeatedly updated over the course of 35 years and has sold over a million copies. It sounds great until you realize that penny stocks trade in the single digits for a reason. On the internet is a great place to look for the company and investigate its background. You’re definitely not buying the company at a time when they are generating peak returns. Therefore you will have fewer swings on a shorter sample size and at the end will likely experience slightly lower returns (at least this is what has been seen so far).