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• A cautionary tale: The importance of asset location

  Posted Jan 31 2008, 07:06 AM by Karen Datko
  Filed under: retirement, taxes, The Dough Roller, mutual funds, tax shelters
  Money Blog: Smart Spending Blog - MSN Money

  This post comes from partner blog The Dough Roller.

  Asset location involves dividing investments between taxable and tax-deferred accounts in the most tax-efficient manner.

  As a general rule, mutual funds that generate a lot of dividends or capital gains should be placed in 401(k), IRA or other retirement accounts. Investments that do not generate a lot of dividends or capital gains can be placed in taxable accounts. Following this strategy, I've put all my bond funds, REIT funds and most of my small cap funds in retirement accounts.

  What happened to REIT mutual funds last year offers a hard lesson for some about why asset location is so important.   Read More...

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