Lazy Portfolio Advice
How to outperform 97% of all investment money managers
for free using only one hour every 6 months!
“The vast majority of what we have been taught about investing is not effective for long-term individual investors.”
|– James Cloonan, AAII Founder & Chairman
|"If, as many practitioners and academics believe, we are facing decades of modest returns, your focus should move from searching for the best manager to aggressive management of expenses
and taxes ... . A one-half percent savings may increase your net real return by 20%."
|- Harold Evensky, President, Evensky & Katz, AAII 2013 Investor Conference
Do Not Put A Tax Shelter Inside A Tax Shelter
- Do not put tax exempt municipal bonds or municipal bond funds inside an IRA, 403(b), or 401(k)
- Do not put an annuity inside an IRA, 403(b), or 401(k)
- Do not put a life insurance policy inside an IRA, 403(b), or 401(k)
- Do not put a Master Limited Partnership (MLP) inside an IRA, 403(b) or 401(k)
- Do not put stocks that require foreign tax to be paid inside a tax shelter. The tax is not deductible on your Federal 1040.
- Do not put any other kind of tax advantaged investment inside an IRA, 403(b), or 401(k)
Take Mutual Fund Distributions In Cash
- Sweep your mutual fund distributions into a money market fund
- Avoids tax complications caused by the 30 day wash-sale rule
- Avoids "buying high" when distributions are reinvested in a mutual fund at a high
- Simplifies income tax accounting when you file your Schedule D with your Federal 1040 form
- Allows you to withdraw cash for living expenses without putting in sell orders
- Simplifies rebalancing your lazy portfolio at rebalancing time
- Invest your "excess cash" from distributions when you rebalance (twice a year in May and November)
Recommended General Asset Allocations
- 60% Stock/40% Bonds: Putting money into portfolio
- 40% Stock/60% Bonds: Taking money out of portfolio
- 50% Stock/50% Bonds: Neither putting money into or taking money out of portfolio
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