Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
<<Thus, to come back to Foolish principles, making money by trading (vice investing) requires a stock pick that outperforms the index funds even after taking a healthy chunk out for capital gains tax. Makes buy and hold about the only reasonable alterative for casual investors- otherwise, we have to beat the S&P by at least 20% just to cover the capital gains tax. >>

Hi again, Jason...

Don't get too concerned with the advertised rate of return. You have to compare apples to apples. If you are checking your after tax returns with other returns (such as mutual funds, S&P, etc.) you'll have to REDUCE those returns by tax payments also.

Unless you hold the stock or fund until death (not very likely in many circumstances), you'll have a tax impact some time in the future. So get those returns on the same playing field BEFORE you make your investment decisions.

TMF Taxes
Roy
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement