How This Judge Can Increase Your Returns

Be sure to take these steps now... [Shield] AN OXFORD CLUB PUBLICATION [Liberty Through Wealth]( [View in browser]( SPONSORED [Why This World-Renowned Income Expert Is Quitting the Stock Market]( 2022 was the worst year for the market since 2008. And - unfortunately - the pain isn't going to end anytime soon. Fortune magazine analysts are warning that a recession is coming for most developed nations in 2024. Sure, the market could bounce back tomorrow... but [Chief Income Strategist Marc Lichtenfeld isn't willing to risk it](. So if you can't afford to lose money right now, [you need an alternative](. [It's time to quit the stock market.]( THE SHORTEST WAY TO A RICH LIFE [How This Judge Can Increase Your Investment Returns]( [Alexander Green, Chief Investment Strategist, The Oxford Club]( [Alexander Green]( Some investors seek growth. Others are looking for income. But what all investors should really be interested in is maximizing their total return. How do you calculate your total return? Here's a simple formula: Total return = return on invested capital + dividends and interest - investment expenses - taxes. I spend most of my time here talking about how to increase your gross returns. But with April 15 just around the corner, today let's look at how to increase your net returns by reducing your taxes. In my former life as an investment advisor, I was surprised how many investors were oblivious to the tax consequences of their investment decisions. Big mistake. If you're not careful, you can turn thousands of dollars over to the IRS each year... unnecessarily. SPONSORED "It is abundantly clear that [this man]( is of genius mentality... His trading system is a game-changer!" [Alpesh Patel]( As one of the most respected names in finance, Alpesh Patel has quite the resume: - Hedge fund manager - World-renowned trading coach - Bloomberg host - CEO - Author of 18 books on investing - And more! He's seen and done it all. And TODAY... [He's sharing the 27-year-old trading secret he's relied on for decades]( once reserved for the world's richest investors (with $10M+ net worth!). [>> See it for yourself here. <<]( Here are five simple steps you can take to "tax-manage" your investment portfolio: - Buy individual stocks. By choosing whether to sell them in any given year, you control your potential tax liability. If you haven't taken a profit, there's nothing for the IRS to tax. Remember: the capital gains tax is not a tax on capital gains. It's a tax on transactions. (This is why Warren Buffett says his favorite holding period is "forever.") - Minimize turnover. Taking short-term capital gains means subjecting yourself to short-term capital gains taxes as high as 37% (depending on your tax bracket) - plus possible state income taxes as well. If possible, hold winners for at least a year, if possible, to qualify for a preferential tax rate. Long-term capital gains taxes run from 0% to 20%. (Although high income earners may be subject to an additional 3.8% tax on both long- and short-term capital gains.) - Offset your gains whenever possible. The IRS allows you to offset all realized gains with realized losses. And you can take up to $3,000 in additional losses against earned income. No one likes to take a loss, but occasional ones are a fact of life for every investor. The tax benefits make them less painful. - Use your IRA, pension, 401(k) or other tax-deferred account to do your short-term trading since all profits will compound tax-deferred. Also, use these accounts to hold taxable bonds and real estate investment trusts (REITs) since these are high-income payers that don't qualify for the favorable tax treatment that U.S. corporate dividends receive. - Own index funds rather than actively managed funds. Index funds tend to be highly tax-efficient because changes to an index are rare. Managed funds, on the other hand, often have high turnover and Federal law requires them to distribute at least 98% of realized capital gains to shareholders each year. You can get hit with a big capital gains distribution even when you haven't sold a share. And that's true even if the fund is down for the year. That hurts on April 15. Take these steps and you'll lessen the government's annual tax bite on your portfolio, increasing your long-term returns substantially. The few remaining choices are simple ones like owning tax-free rather than taxable bonds if you reside in the upper tax brackets. In short, be aware of the tax implications of all your investment moves. Taxes shouldn't be your first consideration. But they are an important one. Whenever I write on this topic, I invariably hear from a few folks who tell me that avoiding taxes is un-American or unpatriotic. Baloney. The provisions that exist in the tax code were put there to encourage Americans to save, invest, own a home and take risks. So tax-manage your portfolio with a clear conscience. As Judge Learned Hand, who served for years as Chief Judge of the U.S. Court of Appeals for the Second Circuit, famously wrote... Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the courts have said that there is nothing sinister in so arranging ones affairs as to keep taxes as low as possible. Everyone does so, rich and poor; and all do right, for nobody owes any public duty to pay more than the law demands. Amen, Judge. Good investing, Alex [Leave a Comment]( [2024 Private Wealth Seminar at the Wequassett Resort & Golf Club in Harwich, Massachusetts on October 7-8, 2024]( BUILD AND PROTECT YOUR WEALTH - [This Company Just Solved Europe's Energy Crisis... 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