Quote:
Originally Posted by CoachKandSportsguy
Due to the ETF tax efficiencies, the general rule of thumb is ETFs for taxable accounts and mutual funds for tax deferred IRAs/401Ks
The advantage of ETFs is that an individual can create an age/risk appropriate diversified portfolio which can return similar performance to active mgmt mutual funds, with the biggest advantage is controlling risk and tax implications. With a mutual fund, you are subjected to the portfolio managers tax decisions and costs.
If you want to see a simple, but well balanced, ETF portfolio at work is here
https://www.jpmorgan.com/content/dam...Report_JPM.pdf
you can follow along as well, and make this your benchmark portfolio to track your portfolio against.
good luck |
This is critical. "Due to the ETF tax efficiencies, the general rule of thumb is ETFs for taxable accounts and mutual funds for tax deferred IRAs/401Ks."
I know someone (not me) who invested hundreds of thousands of dollars in mutual in a taxable account. Had huge losses and still had to report the capital gains distributions on their tax returns. That's why it is better to speak with your tax advisor before making investment decisions on your investment accounts.
ETF'S are a better option than mutual funds for both taxable and non-taxable accounts, IMHO.