When it comes to portfolio construction, most investors have asset allocation down pretty well. Or at least they can use a basic online risk tolerance formula/calculator to determine the amount of stocks, bonds, and other assets they should have.
But when it comes to asset location, most investors are clueless.
That’s a problem, because where you stick a stock, bond, or managed futures pool has just as much bearing on your end result as does moving up or down on the risk scale. You can thank Uncle Sam for that.
For dividend stock investors, this is particularly important as many portfolios contain a variety of investments that throw off yield and income.