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Course 205: The Best Investments for Tax-Deferred Accounts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Of course, studies are merely that--studies. They don't always reflect your real-world situation. For example, these studies don't address what an investor who is 100% in stocks ought to do.
A few rules of thumb for all-stock investors:
(We'll cover more options for taxable accounts in Portfolios 206: The Best Investments for Taxable Accounts.) Moreover, the study doesn't touch on the quality of the fund choices available within the tax-deferred plan. Say your retirement plan offers only two choices: a highly rated large-cap index fund or a poorly rated high-turnover small-cap fund. If you listened to the study, you'd probably choose the small-cap fund for tax reasons--even though it's not the better investment overall. Don't let taxes considerations overshadow the quality of an investment. Next: The Quiz >> |
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Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores. | ||
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