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Nike's stock surged Wednesday after CEO Elliott Hill disclosed open-market purchases — a week after Apple CEO and board member Tim Cook did the same.
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Stock Market Today: Silver Prices Slide; Dow Inches Lower to End 2025 — Live Updates The Wall Street JournalS&P 500 slides, but gets set to close out 2025 with 17% gain: Live updates CNBCWall Street is slipping in light trading on the final day of 2025 The Detroit NewsStock market today: Dow, S&P 500, Nasdaq futures slip with Wall Street set to put a bow on roller-coaster 2025 Yahoo Finance
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Editor's note: This is part six of a seven-part series. It dives more deeply into the second strategy for defusing a retirement tax bomb, implementing asset location. If you missed the introductory article, you may find it helpful to start here.
Most investors have heard of asset allocation, but asset location is another story - and it could help investors with large tax-deferred savings reduce their tax bills in retirement.
SEE MORE When It Comes to Your RMDs, Be Very, Very Afraid!
Asset allocation refers to how a portfolio is allocated to various asset classes that have different historical investment returns and standard deviations. The simplest example is a stock-bond allocation, such as a 60% stock, 40% bond allocation, which is a common allocation for retirees. But there are dozens of more granular asset classes that can be managed as well, for example, U.S. large cap stocks or international small cap value stocks. Asset allocation is critical to effectively diversify your portfolio and reduce risk.
Asset location is different portfolio management strategy: one that few clients I meet have heard of. Few financial advisers implement it as well. Asset location seeks to minimize taxes by placing different asset classes in specific tax buckets (taxable, pre-tax, tax-free).
Putting Asset Location into Practice
In a nutshell, here's how asset location works:
Typically, you want to place investments with low expected returns, such as bonds, into tax-deferred accounts.Place investments with high expected returns, such as small value or emerging market st
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