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Investors often have multiple sub portfolios which can
include a general taxable investment portfolio accompanied with specialized
portfolios such as retirement accounts, partnerships, trusts, corporations,
foreign investments and various estate planning vehicles. These specialized portfolios often
have unique tax, funding and disbursement rules.
Besides tracking these separate sub portfolios, there
is also an asset location issue.
Based on the rules, certain assets are better positioned in different sub
portfolios. For example, a high
yield taxable asset that would be avoided in a taxable portfolio might be well
suited for a specialized sub portfolio that offered tax-exempt investing.
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Additionally, investors with multiple sub portfolios
requiring asset location and asset allocation often need aggregate analysis so
they can plan their cash flow funding and expenditures.
The pie charts to the right show an aggregate portfolio
with two sub portfolios: investment and 401(k).
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Click on images to enlarge ... |
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