It is common for investors to spend a lot of time thinking about what they own. Where they own it deserves the same level of attention. Both have a real impact over time.
Here is what I mean. A taxable account, an IRA, and a Roth all play by different tax rules. The same investment can behave very differently depending on which one is holding it. Bonds throwing off interest in a taxable account get taxed every year. The same bonds in a tax-deferred account do not. High-growth stocks in a Roth can grow tax-free under current rules. Those same stocks in a taxable account can trigger a tax bill every time the portfolio gets rebalanced.
Many portfolios are not built with this in mind. The same allocation gets copied and pasted across every account, and the tax friction over the years can add up to more than people realize.
It is one of the more overlooked levers in wealth management. And one of the more rewarding ones to actually pull.
This material is for general information and educational purposes only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the loss of principal. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Origins Private Wealth and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.