FIN 501 Chapter Notes - Chapter 3: Tax Bracket, Savings Account, None Of The Above
22 Jun 2014
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Inactive buying and holding for long periods of time: very active buying and selling frequently o, willing bear substantial risk in seeking out returns, safety primary concern. Objectives: risk and return: risk-adverse dislike risk and want to expose themselves to minimum risk level possible o. Larger return is associated with larger risks trade off. Evaluating suitability of investment strategy risk tolerance: risk is not a simple concept. Short period over which they did much worse. Taxes different types of investments are taxed very differently: after tax return taxes are a vital consideration. Higher tax bracket investors will naturally seek investment strategies with favorable tax treatments. Lower tax bracket investors will focus more on pretax returns. Way in which investments are held can dramatically affect its tax status. Tax laws and other rules are in a constant state of flux: certain types of accounts (retirement saving accounts) receive preferential tax treatment.
