Table of Contents chevron_rightThree Account Types to Know chevron_rightTax Efficiency and Stocks chevron_rightMutual Funds Can Be Tax Efficient chevron_rightIndex Funds Aren’t a Tax Cure-All chevron_rightTax Efficiency and Bonds chevron_rightTaxes and Your Portfolio Home Guides & Resources chevron_right Investing Special Report Investing and Taxes August 25, 2022 Table of Contents Three Account Types to Know Tax Efficiency and Stocks Mutual Funds Can Be Tax Efficient Index Funds Aren’t a Tax Cure-All Tax Efficiency and Bonds Taxes and Your Portfolio We all know that taxes are one of life’s certainties—one that many people would prefer to avoid. However, singularly focusing on minimizing your tax bill each year could compromise your investment plan and its potential gains. A long-term perspective, preparation and planning to manage your annual tax burden can help you strike a balance between paying less in taxes and improving your portfolio’s returns over time. Taxes are a cost—reducing the amount of income and capital gains you keep—and as with all costs, keeping taxes low is a sensible practice. But be wary of “letting the tax tail wag the portfolio dog.” By that we mean that investors sometimes take their tax reduction efforts too far and lose sight of the real goal of investing—it’s not about writing the smallest check to Uncle Sam, but maximizing your after-tax dollars. The path to one doesn’t always lead to the other. Unlock Access to the Full Article
Home Guides & Resources chevron_right Investing Special Report Investing and Taxes August 25, 2022 Table of Contents Three Account Types to Know Tax Efficiency and Stocks Mutual Funds Can Be Tax Efficient Index Funds Aren’t a Tax Cure-All Tax Efficiency and Bonds Taxes and Your Portfolio We all know that taxes are one of life’s certainties—one that many people would prefer to avoid. However, singularly focusing on minimizing your tax bill each year could compromise your investment plan and its potential gains. A long-term perspective, preparation and planning to manage your annual tax burden can help you strike a balance between paying less in taxes and improving your portfolio’s returns over time. Taxes are a cost—reducing the amount of income and capital gains you keep—and as with all costs, keeping taxes low is a sensible practice. But be wary of “letting the tax tail wag the portfolio dog.” By that we mean that investors sometimes take their tax reduction efforts too far and lose sight of the real goal of investing—it’s not about writing the smallest check to Uncle Sam, but maximizing your after-tax dollars. The path to one doesn’t always lead to the other. Unlock Access to the Full Article