Proper Asset Location

Investor's Alpha:  Proper Asset Location

The fifth part of our Investor's Alpha series illustrates the extra return an investor can harvest by properly locating their investments among taxable and retirement accounts.  An investor can enhance their long-term returns by reducing taxes by placing investments that are subject to high taxes inside of retirement accounts to minimize tax drag.  In addition to properly locating assets, an investor can also increase portfolio longevity in retirement by withdrawing assets strategically from a combination of taxable accounts, Traditional IRA, and Roth IRA accounts.

Proper asset location is an investor driven controlled input that can enhance returns with a low amount of time and effort.  As in real-estate, location can help increase portfolio returns during the accumulation phase and increase longevity during the distribution phase.

  Wealth = Factors You Control + Investment Returns