Smart investing takes more than just buying the right stocks. You also have to put those stocks in the right place. In particular, using retirement accounts to their full potential while also being smart about how you invest in taxable accounts can make a huge difference to how much the IRS gets of your hard-earned money.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, takes a closer look at how to find smart stocks to buy for your taxable investment IRA. Dan notes that the ideal situation is to have buy-and-hold-forever stocks in your taxable account, as never having to sell means never having to pay capital gains taxes. In addition, minimizing dividends makes sense, as even with preferential rates, most taxpayers still have to pay some tax on dividend income.
Dan concludes with some prospects for investors to consider. He notes that Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) has been an ideal taxable-account stock over the decades, but any high-growth stock with no dividends can be a good choice if you think it has long-term potential. priceline.com (NASDAQ:BKNG), Google (NASDAQ:GOOGL), and other well-known names have served taxable-account investors well.