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I think there are a few points here to note. There are a few issues to investing in a taxable account, namely taxes and having a strategy. There are a couple of things you may want to consider:

1) Tax-managed funds. These are funds that are managed to keep distributions low, so for example instead of Vanguard's 500 Index, you take Vanguard's Tax-managed Growth & Income which is a bit better in terms of tax efficiency. Vanguard, Schwab, and likely a few other fund companies have these now and typically they come with miniums in the $10,000 range and have redemption fees. Usually there is something in the name of the fund to indicate that it is tax-managed or tax-sensitive.

2) Funds where the manager is watching for taxes. This is a harder group of funds to nail down. Oak Associates funds and Third Avenue are a couple that I know of that do this. Van Wagoner tries to keep an eye on taxes although he is an ultra-aggressive fund manager.

3) Index funds come in 3rd here since some index fund managers may not keep an eye on taxes.

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