By Dr. Leif Dahleen of Physician on Fire, Anesthesiologist, WCI Network Partner
As an investor in international stocks via several index funds, I’ve considered and reconsidered in which account I ought to hold those funds.
The primary goal of asset location is to increase the tax-efficiency of your portfolio, at least it will be for most people. You want to pay the lowest amount of tax on your chosen asset allocation.
That “al” is an important distinction. Asset allocation determines what you own and in what percentages. Asset location defines in which accounts you hold the assets you own.
My assumption has been that the taxable brokerage account is the best place for international funds for a few reasons that I’ll discuss below, but I have never put that theory to the test.
With the aid of—what else—a spreadsheet, we’ll determine what is the optimal location for your international