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September 12, 2007


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Great post. I have 20% in US Large cap, 20% in US Mid cap, 20% in US small cap, 30% international, 5% REIT, and 5% company stock. I am just curious about what you do for yours. Can you share?

I currently have my 401k investments going into three Fidelity funds -- two domestic index funds and one international fund.

That Money article loses alot of credibility when they seem to assume that a particular company stock would underperform a diversified portfolio. The reason you don't go company-stock heavy is not because you want to increase returns, but because you want to decrease risk.

Hmm. I had wondered why people ended up with so much company stock. But if the company gave it to them and they were too lazy/faithful to change it...that makes sense. I'm not sure how my company does its contribution yet, but I'll be sure to look out for company stock and limits. Thanks.

Having a lot of company stock is financially unwise, I know, because you already depend on the company for your salary. I plan not to have any.

To minimize taxes and maximize savings for a given asset allocation, you have to use retirement vs. taxable accounts correctly. To the extent possible while achieving your chosen asset allocation, fixed income investments should go in your retirement account, and stocks in your taxable account (buy and hold passive, tax-efficient, low cost index funds, and don't trade). Be as aggressive as you want in terms of equity percentage using your taxable accounts, but it is silly to increase your taxes eventually by having your capital gains taxed at the much higher ordinary income rates which is what happens when you hold your stocks in your retirment plan. For further explanation, see the excellent book and AAII articles by Professor William Reichenstein of Baylor University

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