Portfolio Diversification

One question that we get frequently is:

“Which type of account should I utilize if I can save an extra $100 a week? Should I add it to my 401k at work or in a savings/investment account?”

This is when it pays to have a team working on your side. We like to conference in your tax advisor and “brainstorm” back and forth regarding what type of investment would be the most beneficial for our common client from a tax standpoint.

When it comes to retirement savings and investing, there are a variety of ways that your savings and investments will be taxed. Investments might be:

  • Tax-advantaged (most likely municipal bonds and Roth IRAs/401ks)
  • Tax-deferred (usually 401ks, IRAs, annuities)
  • Taxable at capital gains rates (typically profits on investments held over one year)
  • Taxable at ordinary income rates (interest, bond income, REIT dividends, etc.)

While we cannot always pick and choose how our investments will be taxed due to the IRS and tax code changes, at Craig Wealth Advisors, we work as a team with you and your tax advisor. Working together, we can hopefully balance taxes now and later to meet your specific goals and needs.


In addition to having different types of accounts (taxable, tax free, tax deferred, etc.) in your portfolio, it is equally important to have the correct asset allocation. There are a number of different asset allocation models to consider but they all result in diversification across the different asset classes such as growth, growth and income, international and aggressive growth. Debbie explains 2 different models in this video. What model is for right for an individual investor based on their goals and risk tolerance as well as the type of accounts within their portfolio

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Debbie Craig and not necessarily those of Raymond James. The information has been obtained from sources considered reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Raymond James does not provide tax advice.