Seeing the reduced tax on his capital gains and dividends, Lars feels confirmed in favoring stocks over bonds. There is part of his portfolio that doesn't show up in his income tax return, though, at least not yet: his retirement plan.
Some of it actually never will: the Roth portion. Lars's firm has a 401(k) plan, and he has some of his account in Roth status, meaning he pays the tax on the income as it goes in, but neither the future income and gain on these contributions, nor the distributions when they come out, will be taxed. Lars likes this idea.
Even the non-Roth portion of the retirement plan that will be taxed when it comes out, gets tax-free growth in the meantime. This takes away one of Lars's reasons for not liking bonds, the taxation of interest income at ordinary rates.
So all income within the retirement plan, Roth or non-Roth, is tax-free. Lars thinks this means he should invest in a way that makes the most money, without concern over tax effects. For Lars, this too means stocks over bonds right now, even without income tax considerations.
Actually what Lars is doing right now isn't just to make the most money, at least in the short run. He's parked a lot in short-term fixed income securities, with a yield of just about 1%, with the idea of at least some of it going back into loner-term bonds when interest rates go up. It's more about not losing money right now, than about making a lot of it. Lars likes to think that he's learned some nice lessons from reading military history, how it's not always best to move forward.
What about investments other than stocks and bonds? Lars already has a lot of real estate, present and future (some to come from old and rich Uncle Nils). He kind of likes REITs (real estate investment trusts), although they seem to be selling at a premium right now. Lars is starting to get an idea that REITs have the income and interest rate sensitivity of bonds in the short run, but the potential for growth like stocks in the longer run. But he's not sure about this yet.