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Asset allocation between taxable and non-taxable accounts

Bogleheads • View forum - Investing - Help with Personal Investments - www.bogleheads.org
Hi Bogleheads,

I've heard a lot of advice on asset allocation and what the ideal allocation should be and also about what types of investments to have in a taxable account vs non-taxable, but given that, how do you allocate when you have money in taxable accounts and in non-taxable accounts.

Let's say the ideal allocation is 60% Domestic Stock, 30 International Stock, 10% Bonds.

Would you try to keep both your taxable and non-taxable accounts both having the same allocation? Let's say the amount of money in both types of accounts is the same.

In my real scenario, in my taxable account I am closer to 90%/10%/0% and my non-taxable is 30%/50/20%.

I currently have my non-taxable account automatically rebalancing each year to this percentage. But I don't really do any rebalancing with my taxable acccount, nor do I rebalance between taxable and non-taxable.

Am I being non-efficient here? The reason's for me doing what I have been doing is just because I do most of my individual stock investing with my taxable account and I mostly invest in domestic stocks. Given that I have so much domestic stock in my taxable account I try to balance that out by putting more of my non taxable 401k into international index funds and bond funds, rather than domestic index funds.

Do you see any pitfalls with how I'm currently allocated? Is there something I should consider changing?

Thanks for your suggestions.


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