Since 2020 members of the Ruedi Wealth team have been writing weekly investing and retirement planning columns for our local newspaper, The News-Gazette.
You have many options to minimize the taxes on your investment portfolio. Some of them are so simple anyone can do them, others are more complicated and may require the help of a professional.
When people think of the ways financial advisors create value for their clients, their minds likely run to exotic financial strategies and meticulous calculations. But as I look back, the most valuable thing I did throughout my career was convince people who were piling up cash to invest in the stock market.
I think when investors buy an individual company they assume their worst case scenario is that the stock price doesn’t very much or at worst falls 20 or 30% in value. But individual companies can fall over 99% in value.
When the market faces adversity in the future, as it inevitably will, investors will once again be tested. At that point though they will be tempted to think “this time is different.” They should instead focus on the fact that “this too shall pass.”
We get a peak to trough decline of 10% or more almost every year. They show up with such a frequency that on our radio show we often refer to declines of this magnitude as the “crosstown bus.”
The tax treatment of an investment depends on four things: the type of investment account, the form of investment return, how long a person has held an investment, and a person's total taxable income for the year.