Assets Glocalization Unicorns
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Portfolio Composition

Once you have a solid understanding of different asset types, you can better implement those investments in your strategy. At Assets Globalization Unicorns, we believe the primary driver of an investor's long-term success is having the appropriate asset allocation—the mix of stocks, bonds, cash, and other securities in an overall investment strategy. A common industry view suggests that asset allocation should change as you age, with a gradual shift towards "safer" assets like bonds as you get older. We disagree with this approach. We believe this strategy could increase the risk of depleting your funds in later years. Investors often underestimate their future needs, including how long their assets need to last. If your goals require investment
growth, you likely want to maintain a significant portion of your investments in stocks, as they have historically demonstrated superior long-term growth compared to other asset classes. At Assets Globalization Unicorns, we believe your asset allocation shouldn't change frequently. We think it should only be adjusted if your goals or circumstances change significantly. For instance, if you decide to retire earlier than planned or need to make larger annual withdrawals than anticipated, you should reassess whether your asset allocation still meets your needs. If not, adjust accordingly.

Investment Types

When you invest in a stock, what exactly are you acquiring? How do mutual funds differ from exchange-traded funds (ETFs)? It's surprising how many experienced investors lack complete or accurate answers to these essential investing questions. Each asset type—stocks, bonds, annuities, mutual funds, and others—operates differently. At Assets Globalization Unicorns, we observe that many investors do not fully grasp how various assets function and often overlook the risks involved. Before making any investments, we can help clarify the distinctions between these asset types, empowering you to make more informed financial decisions.

Portfolio Earnings

Many investors prioritize income-producing assets like bonds and high-dividend stocks, especially when approaching retirement. However, focusing solely on income can be problematic. It's crucial to understand the distinction between dividends (a return of capital) and interest income (a return on capital). Dividends are voluntary payments that companies can cut, leaving investors relying on them without steady income if the companies face distress. Concentrating on dividends alone can also lead to overexposure to certain market sectors that may have lower growth potential. At Assets Globalization Unicorns, we believe looking at total return - both dividend yield and price appreciation - is most important. This comprehensive approach
can potentially increase overall returns. We recommend a strategy we call "homegrown dividends" - periodically selling stocks to generate cash flow that complements any dividend or interest income. By understanding income assets and adopting a total return mindset, investors can build more resilient, lucrative portfolios. A balanced approach considering both income and growth is often key to long-term investing success.

Portfolio Income Taxation

Your investment income strategy can significantly impact your tax situation, as different asset types come with varying tax consequences. For instance, interest from corporate bonds is typically taxed at your ordinary income rate, while profits from stock sales may be subject to lower capital gains rates, depending on how long you’ve held the asset. Dividends can also be taxed at different rates, often lower than ordinary income tax rates, depending on the type of investment and your income bracket. Additionally, the tax implications can vary based on the types of investment accounts you hold, such as traditional IRAs or Roth IRAs, which have different tax treatments upon withdrawal. Understanding these tax considerations is essential for optimizing your investment strategy and ensuring that you are aware of how your income will be taxed. By being informed about the tax consequences of your investments, you can make more strategic decisions that align with your financial goals.
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Discover why 155,000 clients* trust Assets Globalization Unicorns to manage their investments and how we can assist you in achieving your financial goals. Our comprehensive approach ensures that you receive the guidance and support necessary to make informed decisions for your future.

*As of 7/1/2024
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