Category: MoneyLab
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Capital Gains Tax – How Much is Too Much?
Capital gains occur when securities are sold at a higher value than their purchase price, reflecting growth in your portfolio. While this is a positive sign, it also comes with a tax bill. For this article, I attempted to solve for the minimum amount of capital gains a balanced portfolio…
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Basics of Portfolio Construction
The 10-year annualized return on the US tech sector has been about 19.7%, vs. the total US market at 8.6%, US Small stocks at 7.7% and International at 4.9%. It seems pretty clear that tech has dominated, so why do most modern portfolios still include these other visibly underperforming assets…
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Unrealized Gains – Pay the Tax and Move on?
Whether you are a frequent trader or not, investors will inevitably come across this situation: Being “stuck” with an investment because swapping it for another would cost a lot of taxes. Most times this results in indecision, and a less-than-ideal portfolio. This article will walk through the analysis behind how…
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Premium vs. Discounted Bonds – Which is Better?
US Government bonds represent one of the largest and most heavily traded markets on the planet, and you’ve decided you need to own some. So which do you buy? This article will take a deep yet brief dive into the vastly different experiences an investor could have owning what look…
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How Portfolio Taxes Can Erode Wealth
Investors rarely factor in the impact taxes have on their portfolio return. This impact is commonly referred to as tax friction. Simply, tax friction is the way taxes eat away at your investment gains. When you make money from interest, dividends, or selling stocks, you have to pay taxes on…
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Risk Capacity & Risk Tolerance – Asset Allocation
Risk Tolerance – Your willingness to take risk in the investment markets. Based on how you feel.Risk Capacity – A measurement of how aggressive you can invest without jeopardizing financial stability. Based on math and statistics. Often times an investors portfolio mix is said to be determined by a questionnaire…
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What’s the point of rebalancing?
Rebalancing – The practice of returning the values of certain assets in your portfolio to their prescribed percentages defined by an investment plan. Marketed as an important piece of your investment plan, rebalancing is often misunderstood, or simply – practiced blindly. In other words, many do it automatically without first…
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