Location Is As Important In Tax Management As It Is In Real Estate

solar power housing residential development 

Solar powered houses are pictured in Ota, 80km northwest of  Tokyo,

Location Isn’t Just Important In Real Estate, It Also  Plays A Key Role In Tax Management

In tax management, like in real estate, location is key, according to  Vanguard’s Maria Bruno and Joel Dickson. “The general rule of thumb is to place  tax-inefficient investments, things that generate a lot of income that may be  subject to taxes, within tax-advantaged accounts and hold tax-efficient  investments in taxable accounts,” said Bruno. “Things like broad market index  funds, for instance, or municipal bond funds, those that have—they may be more  tax efficiently managed or are not subject to income taxation in taxable  accounts.”

While Dickson thinks asset location is important, it’s not as important as  “maximizing the tax deferred opportunities,” he says. “And where it matters most  is the closer that you are to a 50/50, for example, stock/bond split of your  portfolio and a 50/50 split between assets held in tax- deferred accounts and  taxable accounts. That’s where you sort of maximize the benefits from asset  location.”

Two Of The Biggest Names In Wall Street Social Media  Have Launched Their Own Investment Firm 

Wall Street social media giants Barry Ritholtz, who blogs on The Big Picture,  and Josh Brown, who writes The Reformed Broker blog, have teamed up to start  Ritholtz Wealth Management. The investment advisory firm is registered with the  SEC and has over $100 million in assets under management (AUM). “We’ve been  kicking around for a long time,” Ritholtz told Business Insider. “This is  something you always kind of think about… ‘What if we could make all the  decisions?’ Everything we’re doing is essentially the same, only now we have the  opportunity to really reinvest in the firm. There’s just so many things you can  do for clients but they all cost money. Now we can reinvest all our capital into  running the business.”

There Will Be Even Fewer Financial Advisors In  2017

As advisors continue to retire, the industry will lose 25,000 advisors by  2017, according to a new report from Cerulli. The industry peaked in 2005 and  now has about 280,000 advisors. “A good number of advisers are coming up on  retirement,” Cerulli analyst Sean Daly told Investment News. He said it isn’t  clear though whether some will continue to work beyond the typical retirement  age. He also pointed out that financial firms need to do more to attract new  talent as the number of retiring baby boomers grow and the number of advisors  available to help them shrink.

This Dart Board Suggests It’s A Great Time To Buy  Stocks

Looking at 73 years worth of next-12-month returns for the S&P 500, on  various levels of the price-to-earnings ratio, Citi’s Tobias Levkovich found  that the best time to buy stocks is when the P/E is below 8. The next best time  to buy stocks were when the P/E was at 14 to 16. This chart shows that strangely  returns can be higher even when the market looks more expensive.

valuation bulls ey 

Women Should Get More Involved In Financial Planning  Well Before A Divorce Could Occur

Women need to be more involved in the financial planning process so they are  better prepared in the event of a divorce, Laura Pilz at Merrill Lynch Wealth  Management told FA Mag. Often these women are saddled with debts like property  loans that they didn’t know they had. “What a lot of women do not know is that  they may be entitled to spousal benefits through their ex-husbands, who may be  the higher earners. Advisors should always counsel women to take advantage of  these benefits if they have the opportunity,” Pilz said.

Source: BI

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