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Asset Allocation vs. Asset Location

Asset Allocation

Asset allocation is investing in different asset classes to reduce your investment risk.

Asset Allocation Chart

The combination of asset classes in your portfolio such as stocks, bonds, and cash

Asset Location

Asset location is investing in different tax locations to reduce your tax liability risk.

Asset Location Chart

The combination of portfolio holdings and tax treatment when withdrawing assets


Investment allocation, reallocation, and rebalancing addresses the portfolio risks.

Asset location focuses on the risk of taxation on distributions.

Asset allocation, diversification, and rebalancing do not guarantee a profit or protection against loss. Lighthouse Financial does not provide tax or legal advice. You should seek advice based on your particular circumstances from an independent tax advisor. 

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