Tax-deferred Taxes on earnings are deferred until withdrawal. Tax-exempt Earnings are wholly or partly free from taxes. Roth IRAs and most municipal bonds are common examples. Before selecting an investment, learn its tax consequences for you. Remember, what counts is not what you make on an investment, but what you get to keep both now and in the long run.
Some investments require little or no time commitment or special knowledge.
Others, such as rental property, or a portfolio of high-risk individual stocks may require constant monitoring and management. In a nutshell, the asset allocation which you select must be customized to your situation, needs and temperament. Consider each pair of words below as a continuum. Marking the middle of a line would therefore mean that the features were of equal importance. Little or no management required Much management required Present income Capital growth Conservative Aggressive Figure 5.