In this Q&A episode, we tackle three listener questions covering portfolio efficiency, tax rules, and global diversification.
We start with a deep dive into how to rebalance a seven-figure portfolio without triggering unnecessary taxes. Then we clarify a common (and risky) misunderstanding about dependent tax status and health insurance subsidies. Finally, we explore whether holding investments outside the U.S. makes sense as a form of geopolitical diversification.
Each question reflects a different stage of the investing journey, and the trade-offs that come with growing complexity.
Ally: How Can I Rebalance a $1 Million Portfolio Without Paying Extra Taxes?
Ally is 45, single, and has crossed the $1 million mark — but she’s not convinced her portfolio is as efficient as it could be.
She asks:
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How close is her current asset allocation to the efficient frontier?
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What’s the smartest way to rebalance without triggering unnecessary taxes?
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Can she still do a backdoor Roth if she already has an IRA balance?
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Should she roll her low-fee 401(k) into a rollover IRA for more flexibility?
We break down how investors can rebalance strategically, why tax location matters as much as asset allocation, and how to think about Roth contributions once income limits come into play.
Emma: Can You Split a Dependent’s Tax Status Midyear?
Emma has a 21-year-old child graduating from college next year. Her broker suggested a strategy that sounds appealing — but questionable.
The claim:
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Keep the child on the family health plan
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Split dependent status midyear
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Increase premium subsidies
We explain whether this is actually allowed under U.S. tax law, clarify common misunderstandings around dependents, and outline what families should know before relying on advice that sounds “too good to be true.”
Anonymous: Is It Smart to Hold Investments Outside the U.S.?
Finally, a listener asks a question many investors quietly wonder about:
Is it wise to keep some assets outside the U.S. as a hedge against geopolitical and institutional risk?
We explore:
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The difference between global diversification and geographic fear
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Whether holding assets abroad meaningfully reduces risk
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The trade-offs, complexity, and reality behind investing through foreign brokerages
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Why most investors already have more international exposure than they realize
This discussion focuses on principles, not panic — and how to separate signal from noise when headlines feel unsettling.
Key Takeaways
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Rebalancing doesn’t have to mean selling — contributions, withdrawals, and tax-advantaged accounts matter
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Backdoor Roth contributions require careful planning if you already hold IRAs
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Dependent tax status can’t be split midyear
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Geopolitical diversification sounds appealing, but complexity often outweighs benefits
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Long-term investing rewards clarity, not reaction
Timestamps
Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.
(00:00) Introduction and overview of today’s questions
(02:10) Ally’s question: Rebalancing a $1M+ portfolio efficiently
(06:45) Asset allocation vs. the efficient frontier
(12:30) Rebalancing without triggering capital gains
(18:40) Backdoor Roth rules with an existing IRA
(24:55) Should Ally roll her 401(k) into a rollover IRA?
(31:20) Emma’s question: Can dependent tax status be split midyear?
(34:10) Health insurance subsidies and common misconceptions
(38:00) What the tax rules actually allow
(41:30) Anonymous question: Should you invest outside the U.S.?
(45:20) Geopolitical diversification vs. emotional risk
(50:10) Investing abroad: complexity, trade-offs, and reality
(56:30) Final thoughts on diversification and long-term thinking
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