Taxable account investing

[RoadtoFIRE]

I'm wondering what people think about muni bond funds. I've been buying into the PIMCO california muni bond funds to get state and fed tax exempt dividends. They have really taken a beating price wise. But that means if I buy in now I would be getting 5.4% tax free dividend

[bovie]

Depends on why you want them. I like muni bonds for taxable, in general.

Not so sure about this one though. Pretty high ER for a bond fund, especially compared to return. But that's not really why you'd be holding it, hopefully.

Would suggest looking at more diversified options outside of California-specific, and at lower cost, but you do you.

[xraygoggles]

I'm wondering what people think about muni bond funds. I've been buying into the PIMCO california muni bond funds to get state and fed tax exempt dividends. They have really taken a beating price wise. But that means if I buy in now I would be getting 5.4% tax free dividend

??? You wouldn't buy a bond fund because it has "really taken a beating price wise" - you would buy one if it's part of your bond allocation.

If you want CA-specific, that's fine - but I would add some VTEB as well for diversification - although not really necessary. CA is the 5th largest economy in the world - unlikely to default.

[Tim]

I LOVE your VTI/VTEB asset allocation. I'm retired now, but if I could start anew that'd be my AA.


Gotta strongly disagree with this , Cord.
That strategy is a hangover from 80s-90s when interest rates were high; it was tax-efficient to put interest in tax-deferred accounts.
I advocate each account have it's own AA depending upon goal duration and tax-efficiency.

Retirement group with a separate taxable for other purposes makes sense. Across all retirement gotta include all accounts and tax efficiency. You don't want to rebalance each retirement account or taxable with every buy/sell having a tax impact.
Just saying, a little common sense avoids an activity trap. Each account is a mess, materiality etc is another complicating problem. It is to your benefit to use all retirement accounts (including a taxable) in total.