Tax-Smart Investors Avoid Mutual Funds


Transcript:

With tax time approaching it may be worth re-evaluating the way you invest.

Investors should avoid mutual funds, especially, for taxable portfolios.

Mutual funds are expensive… In an investment world that is increasingly driven by indices expense is one of only a few areas investors should try to control.

Mutual funds pool assets, expenses and tax liabilities across all shareholders. This creates the potential for unintended tax outcomes. Investors that own their underlying investments directly not only avoid the tax randomness that can be found in mutual funds but may also harvest capital losses intentionally.

Technology has largely wiped out the advantages historically provided by mutual funds. Investing directly in individual securities eliminates the potential for another investor to impact your taxes.

For these reasons, if you own mutual funds you may want to evaluate other options.

Important Disclosures:

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This material is provided for educational purposes only and contains the current opinions of the authors (as of the date appearing on this material), which may change without notice. This material includes information drawn from third-party sources believed reliable but not independently verified or guaranteed by WealthFactor. We do not represent that it is accurate or complete, and it should not be relied on as such. Any reference to past performance should not be construed and as a suggestion that something similar may occur in the future as past results have no baring on future returns.

This material does not constitute investment advice or contain investment recommendations, which would need to take into account a client’s particular investment objectives, financial circumstances and needs. Investments and strategies discussed herein may not be suitable for all readers, and you should consult with an investment, legal, tax, and/or accounting professional before acting upon any information or analysis contained herein.

This material does not constitute an offer to buy or sell any security or to participate in any investment strategy, and may contain statements based on forward-looking asset class return, risk, correlation, tax and other modeling assumptions. Forward-looking statements expressed herein are subject to may risks and uncertainties related to the underlying assumptions and modeling processes. Actual portfolio results may vary materially from hypothetical results expressed herein due to market, data, modeling and other risks. Past performance does not guarantee future results.

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