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After-Tax Asset Allocation
Definition
This describes a method of asset allocation within a portfolio that distributes its weightings of asset classes (i.e. stocks, bonds, etc.) based on historical or predicted future after-tax returns.
Using the term After-Tax Asset Allocation :
The portfolio manager allocated Ms. Wynkoop's assets on an after-tax basis so she would have a true sense of the cash she would have available, after the government took their share. This technique can be applied to both an active investment approach and a passive approach.
Pay Special Attention To :
No particular issues noted except that tax rates can and do change based on the prevailing political winds. Therefore, ensure your advisor keeps on top of the proposed changes and positions your portfolio accordingly to best benefit. Depending on your advisor relationship, you may need to have your accountant advise you or your advisor on these tax matters.
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Related terms
Active Passive Combination
'After-Tax Asset Allocation' appears in the definitions of these other terms:
Portfolio Allocation
