Which Fund to Buy in a Taxable Account?

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Hooked
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Which Fund to Buy in a Taxable Account?

Post by Hooked » Sat May 20, 2017 6:33 pm

Hi Everyone,

I would like to purchase a mutual fund in a taxable account, and would like your suggestions on which fund to select.

I am looking for something a little more stable than the Total Stock Market Index and more tax efficient than the US Bond Market Index.

This would be for a small percentage of my portfolio and I am planning to leave if there for 5-10 years.

Thank you. :happy

Hooked ...on the wisdom at Bogleheads.org

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David Jay
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Re: Which Fund to Buy in a Taxable Account?

Post by David Jay » Sat May 20, 2017 6:50 pm

Help me understand, are you seeking:
1. You want an equity (i.e. Stock) fund that is more stable than TSM
2. You want a bond fund that is more tax efficient than Total Bond
or:
You want a single fund made up of both equities and bonds?
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

livesoft
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Re: Which Fund to Buy in a Taxable Account?

Post by livesoft » Sat May 20, 2017 6:51 pm

What's your tax bracket for 2017, 2018, …, 2026, 2027?
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radiowave
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Re: Which Fund to Buy in a Taxable Account?

Post by radiowave » Sat May 20, 2017 6:55 pm

What is your overall asset allocation and investment goals? Do you have an investment policy statement (IPS)? Is so, what does it tell you to do?
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Hooked
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Re: Which Fund to Buy in a Taxable Account?

Post by Hooked » Sat May 20, 2017 7:36 pm

Help me understand, are you seeking:
1. You want an equity (i.e. Stock) fund that is more stable than TSM
2. You want a bond fund that is more tax efficient than Total Bond
or:
You want a single fund made up of both equities and bonds?
David Jay - With regard to (1) Is such a fund available? (2) Yes - I thought US Bond Market Index was not a good choice for a taxable account. Likewise, I would consider a single fund.
by livesoft » Sat May 20, 2017 7:51 pm

What's your tax bracket for 2017, 2018, …, 2026, 2027?
livesoft - My tax bracket is 25%.
by radiowave » Sat May 20, 2017 7:55 pm

What is your overall asset allocation and investment goals? Do you have an investment policy statement (IPS)? Is so, what does it tell you to do?
radiowave - My investment goal for this fund(s) is to fund a future home modification. My asset allocation is 65/35.

Thank you.

Hooked

livesoft
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Re: Which Fund to Buy in a Taxable Account?

Post by livesoft » Sat May 20, 2017 7:41 pm

With 25% tax bracket, there is probably no point in using a tax-exempt bond fund. So any mix of a total stock market fund and a bond fund would be more stable than 100% total stock market and any mix of a total stock market fund and a bond fund would be more tax-efficient than 100% total bond index fund.

That means pick any Target Retirement fund or any LifeStrategy fund or any Balanced fund. You can dial in volatility by the split of stocks:bonds.

I myself would just go 100% total stock market index and not worry about volatility.
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sometimesinvestor
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Re: Which Fund to Buy in a Taxable Account?

Post by sometimesinvestor » Sat May 20, 2017 7:51 pm

There is always vanguards tax managed balanced fund perhaps combined with with an international fund if you can take advantage of the foreign tax credit

gilgamesh
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Re: Which Fund to Buy in a Taxable Account?

Post by gilgamesh » Sat May 20, 2017 8:13 pm

Delete

Hooked
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Re: Which Fund to Buy in a Taxable Account?

Post by Hooked » Sun May 21, 2017 6:15 am

Thank you for your responses!

Hooked ...on Bogleheads simplicity.

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