The Bogleheads' Guide to Investing

Bond and bond fund values move in the opposite direction of interest rates.

We also suggest a broad-based, diversified bond fund such as Vanguard’s Total Bond Market Index Fund.

The lower rates on qualified dividends increase the tax-efficiency of stocks relative to bonds whose yield is taxed at ordinary income tax rates. For this reason, and the fact that stocks benefit from the lower capital gains tax rates, we generally recommend placing stocks in taxable accounts and bonds in tax-advantaged accounts.

Only consider investing in no-load funds with annual expense ratios of 0.5 percent or less, the cheaper the better.

We believe that investors will benefit from an international stock allocation of 20 percent to 40 percent of their equity allocation.