To invest successfully, you have to do more than just find great stocks. You also have to put them in the right place.

Let's face it: Once you get picking stocks figured out, one of the biggest challenges of investing is keeping all your accounts straight. You might have a brokerage account for your stocks, as well as a bunch of different mutual fund accounts held separately. You've got your 401(k) invested with one set of funds, a rollover IRA in some different funds, and a Roth IRA you just opened a few years ago. Add that to your 529 plan for your kids' college education, and your financial file cabinet is a disaster waiting to happen.

Even though it takes effort to organize your accounts, it's time well spent. How you invest each of those accounts -- your asset allocation strategy -- can make a huge difference to your returns.

The benefits of retirement accounts
Tax-favored accounts are great for investors. By not having to pay tax on investment income for decades, you'll end up with thousands of extra dollars in your retirement nest egg. That's especially useful for stocks like CapitalSource (NYSE: CSE) and Duke Realty (NYSE: DRE), which pay fairly high dividends that don't qualify for favorable tax rates.

Over time, tax deferral can be worth a whole lot more. For instance, in 40 years at a 10% return, the value of deferring tax effectively doubles your money if you're in the 28% tax bracket. And of course, investing in a Roth IRA means you never have to pay tax on your gains.

Still, you won't want to put all your money into retirement accounts. There are plenty of other financial goals -- saving for a home or car, for example -- where tax-favored accounts aren't available. That's when it pays to know which stocks do well even if they're in taxable accounts.

When you don't need tax deferral
The best stocks for a taxable account have three things in common:

  • They're good long-term buy-and-hold candidates, so you won't have to pay capital gains taxes often;
  • They offer strong but steady growth in their businesses, to ensure that they'll remain good holdings in the future; and
  • They qualify for low tax rates on dividends and capital gains.

Notice that it's not essential to have low dividend payouts. In fact, because the current low tax rate on dividends only applies to taxable accounts -- retirement investors pay higher rates when they withdraw money, even if it came from dividends -- it often makes more sense to pay lower taxes now than higher taxes later.

With those factors in mind, here are five large-cap stocks with stable growth and promising long-term prospects that could be a good fit for taxable accounts:


5-Year Annualized Return

Dividend Yield

Estimated 5-Year Future Growth Rate

Genentech (NYSE: DNA)




America Movil (NYSE: AMX)




Boeing (NYSE: BA)




Chevron (NYSE: CVX)




McDonald's (NYSE: MCD)




Source: Yahoo! Finance.

Over the years, stocks like these, with solid businesses behind them, should continue to see their prices rise. In many cases, dividend payouts will grow as well, rewarding investors two ways.

Retirement accounts give investors a lot of flexibility, letting you ignore the tax impacts of the stocks you pick and the trades you make. That's especially helpful for aggressive investors who buy and sell stocks fairly frequently. For taxable accounts, however, a buy-and-hold approach with solid companies is a great way to take advantage of low tax rates while keeping your overall tax bill low.

For more on being smart about investing and taxes, read about:

CapitalSource and Duke Realty are recommendations of Motley Fool Income Investor. Learn more about how investments that pay income at healthy rates are vital to your portfolio's success. A free 30-day trial comes with no obligation.

Fool contributor Dan Caplinger is always tax-conscious. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of CapitalSource. The Fool's disclosure policy is on your side.