TAX-AWARE INVESTING TO OPTIMIZE Return
TAX-AWARE, NOT TAX-DRIVEN
Unlike many investment management firms, we focus on “real” return: what our clients earn after income and capital gains taxes, fees and the impact of inflation. It’s usually not wise to opt only for tax-exempt or lower-tax options, since these may not always produce competitive after-tax returns. So for our clients in Seattle and elsewhere, we use both tax-exempt and taxable investment planning strategies, depending on which is the most advantageous in terms of real return and each client’s needs.
As an investment management firm, we carefully consider the tax consequences of dividends, income and capital gains for each client portfolio. The tax planning strategies we use include:
- Matching tax-generating assets with tax-advantaged accounts.
- Offsetting gains with losses whenever appropriate.
- Using tax-exempt and tax-advantaged investments as warranted.
- Selecting top-performing asset managers who actively seek to minimize capital gains and dividend distributions.
- Closely monitoring the after-tax return on your investments and reporting taxable distributions to your accountant.
Research has shown that tax-aware investing can significantly contribute to the long-term growth of a portfolio.