Author Topic: Allocation Advice - taxable account  (Read 2578 times)


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Allocation Advice - taxable account
« on: July 14, 2014, 06:13:09 PM »
I started reading recently and realized the necessity of a taxable investment account.  I developed an allocation through Ameritrade's commission free mutual funds.  I'd like some input from those with a little more knowledge than me.  The funds I picked are:

10% - BND - Vanguard Total Bond ETF
10% - VNQ - Vanguard REIT Index ETF
Equity - US:
20% - VTI - Vanguard Total Stock ETF
10% - VTV - Vanguard Value ETF (Large cap)
10% - VUG - Vanguard Growth ETF (Large cap)
15% - VIG - Vanguard Dividend Appreciation Index ETF
Equity - Foreign:
25% - VEA - Vanguard Foreign (FTSE ex North America)

I'm 32, I'll be working 10-15 more years.  I have retirement accounts, this is my stash account.  My preference is to be moderately aggressive.  When I get closer to retirement I'll plan on paring down the equity positions.  In the meantime I won't be selling anything, but I'll "rebalance" by buying positions that have fallen below their desired allocation.  I'd appreciate any comments about this allocation, am I on the right track?


  • Pencil Stache
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Re: Allocation Advice - taxable account
« Reply #1 on: July 14, 2014, 07:44:11 PM »
You should be looking at your asset allocation as a whole. It is preferable to put bonds in your tax deferred accounts as they produce dividends that will be taxed at ordinary income rates. It's also preferable to put international stocks in your taxable account because they provide you a foreign tax credit.


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Re: Allocation Advice - taxable account
« Reply #2 on: July 14, 2014, 08:06:46 PM »
Agree with Joel.  Bonds nor REITs belong in a taxable account.

Your AA would be WAY simpler and easier to manage if you just held 55% Total Stock and were done with it.  There's a lot of overlap there with the large cap funds that's not necessary, IMHO. 

Your rebalancing plan is a solid one.  At the same time, I hesitate to call this portfolio of 90/10 "moderately aggressive" - this is downright super aggressive (the only thing more aggressive is 100% stocks).  BUT we don't know your whole financial picture including your tax advantaged accounts, so I have a feeling it may look more aggressive than it actually is.

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Re: Allocation Advice - taxable account
« Reply #3 on: July 14, 2014, 08:12:48 PM »

Definitely agree with Joel and theday... You need to look at your overall asset allocation, and put the most efficient fund(s) in the taxable. Read the below link to get a better idea of what funds should go in what account to minimize the taxable events.