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Last
update: May 20th, 2009
In our
recommendations to investors, we are increasingly emphasizing exchange-traded
funds (ETFs) over conventional mutual funds because of their lower costs and
greater tax efficiency.
This table
shows three different suggested asset allocations for stocks and bonds, for
Aggressive, Moderate and Conservative portfolios, which will be followed in the
tables below.
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Aggressive
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Moderate
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Conservative
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% Equity
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100%
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60%
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40%
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% Bond
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0%
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40%
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60%
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The following three ETF portfolios
replace our mutual fund portfolios for accounts at:
E*TRADE
FIRSTRADE
SCHWAB
TD AMERITRADE
Any change to any recommended portfolio is not a recommendation to sell mutual funds you may own.
Before you do that, you should carefully consider the tax consequences and any
other relevant factors.
We continue to
suggest mutual fund portfolios for investors with retirement accounts at
Fidelity, T. Rowe Price and Vanguard.
* The Vanguard FTSE All-World ex-US Small-Cap Index fund will assess purchase and redemption fees of 0.75%, as stated in the fund's prospectus.
** The
Vanguard Emerging Market Index fund has a purchase fee of 0.25% and a
redemption fee of 0.25%
*** We recently changed the recommendation for the Vanguard Tax-Managed (TM) Equity
Portfolio. If you already held these three Vanguard Tax-Managed funds
(TM Growth and Income, TM Small Cap and TM International), you should know how long you
have been holding these funds before making any trading decisions. These three funds
apply the 1% redemption fee if held less than five years.
**** We don't have the recommendation for the Vanguard Tax-Managed Moderate
and Conservative portfolios since the tax situation varies from person to
person.
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