Frec’s Post

Do your clients dread Tax Day? A Direct Indexing strategy may help reduce tax surprises. My latest article explains how. #Direct Indexing

Instead of formulating a policy that is destined to fail, it would be more prudent to set a timeframe within which to develop and incorporate a software platform before thinking about capital gains tax from the stock market.

Revolutionize #ETF tax efficiency! ⚡ Explore the insights that could reshape investment strategies https://oal.lu/LLzDY & #MendelsonConsulting transforms #FinancialEfficiency with #ExclusiveSavings here http://oal.lu/7c6OR #TaxEfficiency #Tax #QuickBooksSolutionProvider

Taxes on dividends are the lowest of all other forms of income! Learn how you can save thousands on taxes with dividend growth investing.

In our latest episode, we discuss how tactics like rebalancing during strong market years and tax-loss harvesting in down market years can affect your portfolio. 🎧 Tune in for an accessible discussion on tax planning, capital gains, and portfolio management. https://lnkd.in/gxxfX3_x #Taxes #WealthManagement #PortfolioPlanning

It feels good to pick a winning #investment and sell it for a profit. But then you realize the #capitalgain that looms and all the tax you must pay on it. Tax-loss harvesting is a strategy to help reduce this type of #tax obligation. Learn more. https://ow.ly/5b5I50RcfJb

Morningstar's Tax Cost Ratio is a great metric for assessing the tax efficiency of an ETF, but it has 4 (and a half) flaws I'd like to solve. Similar to expense ratio, Tax Cost Ratio (TCR) tells investors what a fund costs (but in terms of tax). Some examples (3y Tax Cost Ratio)... • Vanguard Total Stock Market ETF (VTI): 0.43% • ProShares S&P 500 Dividend Aristocrats (NOBL): 0.73% • JPMorgan Equity Premium Income ETF (JEPI): 3.57% The half-flaw is that it's annoying to find: • Navigate to https://lnkd.in/gCJeudFY • Search for an ETF by ticker • Squint and find the "Price" tab (???) • Ctrl+f with "tax" to find the actual number The first whole flaw is that Tax Cost Ratio needs benchmarking: • Who cares if VTI's 3y Tax Cost Ratio is 0.43%? • In a vacuum, this is meaningless • I always look at a handful of Tax Cost Ratios side-to-side • Morningstar category, and peer rankings would be great The second whole flaw is that Tax Cost Ratio is pre-liquidation: • Pre-liquidation after-tax return is a great start • [Seriously... h/t to M* for doing this] • It is the return less sales charges and the max federal tax rate • But, ETF sponsors strategically bury distributions in return-of-capital • In this case, tax is deferred, but TCR doesn't capture it • I would like to see a post-liquidation TCR Another thing is that Tax Cost Ratio is too generic: • Assumes the highest federal rates (irrelevant for many) • Ignores state and local tax (sometimes large) The final flaw is that there's no story: • Tax Cost Ratio is just a number • Unpacking TCR into its components would help • e.g. Tax cost from income is different than from capital gain Tax Cost Ratio is an excellent 80/20 solution. But with a little effort, it could be very powerful.

VettaFi's recent article explains tax alpha – the difference between ETFs’ long-term capital gain tax treatment and how investors can potentially receive higher returns through #CPNJ: https://okt.to/YKxrVn More on CPNJ: https://okt.to/mV58eS

In our latest episode, we discuss how tactics like rebalancing during strong market years and tax-loss harvesting in down market years can affect your portfolio. 🎧 Tune in for an accessible discussion on tax planning, capital gains, and portfolio management. https://lnkd.in/gwbSvHqZ #Taxes #WealthManagement #PortfolioPlanning

VettaFi's recent article explains tax alpha – the difference between ETFs’ long-term capital gain tax treatment and how investors can potentially receive higher returns through #CPNJ: https://okt.to/zPFEjZ More on CPNJ: https://okt.to/hsSgmZ