Which Investments Should Go Into Which Accounts?

Investors can potentially boost after-tax returns by placing tax-efficient assets in the right types of accounts. Maxx-Studio/ShutterstockAs an investor, you’ve heard about the importance of diversification. You want a mix of assets like stocks and bonds that adheres to your investment goals, risk tolerance, and time horizon. But once you have the right asset allocation, it doesn’t stop there.It continues with taxation—another thing that can significantly diminish your returns. And different types of accounts have different tax treatments. So where you keep your investments matters, too. This is a strategy known as asset location.