There's an article in the current Forbes magazine which argues that it makes more sense to put bonds in a tax-deferred account and stocks in a taxable one. It makes a lot of sense:
The latest Federal Reserve Survey of Consumer Finances shows that Americans invest their taxable accounts and their tax-deferred accounts--their 401(k)s and Individual Retirement Accounts--almost identically, devoting just over two-thirds of each to stocks. Those who do this are stupid. They should put bonds into the sheltered accounts and stocks into the taxable accounts.Investors are bombarded with information about proper asset allocation: how they ought to split their money among stocks, bonds and other assets. Meanwhile asset location between taxable and tax-deferred portfolios gets short shrift.
Yet according to Carnegie Mellon finance professor Robert Dammon, putting securities into the wrong type of account can easily slice 20% off your ending nest egg. It's especially costly to young and middle-age investors, because their mistakes have longer to compound. [read the rest]
