Investing Under a New Tax Regime
Source: http://www.qvmgroup.com/invest/archives/554Posted on Tuesday, June 3rd, 2008 | In Current Market News, Stocks to Watch
Now that the primaries for both US political parties are over, it is time for investors to begin to evaluate the likely tax change scenarios under the new government that will soon be installed.
All signs are that taxes will rise, but how much and in what ways will differ depending on who is president and which party controls the House and the Senate.
None of the changes are likely to be favorable to investors in general. Accordingly, there will probably be shifts in what is more or less attractive to investors, with resulting changes in money flow and returns for types of investments. Company behavior may change as well.
For example, dividends are a case in point. After the tax laws changed to reduce taxes on dividends, equity income became more popular, several high-yield funds were launched, and companies increased dividend payouts.
If dividends taxes are increased, there may be a shift toward capital gains which can at least be deferred until a position is closed.
If that becomes the situation, higher yield sectors such as utilities and financials may become less attractive while lower yield sectors such as technology may become more attractive. Companies may also reduce the rate of growth of dividends and commit more funds to stock repurchases.
That is one example, but there are many possibilities.
The prospect of carbon taxes introduces an extraordinary wild card in the tax mix. How that would percolate through the economy is uncertain, but likely dramatic.
Now is the time for investors to think about the probabilities and to formulate plans to adjust portfolios appropriately when the tax changes become clear and imminent.
Richard Shaw
QVM Group LLC
Last 5 posts by Richard Shaw
- Hold Reserves, Loan Money or Own Something - November 23rd, 2009
- Are negative yield money funds next? - November 19th, 2009
- Old Normal Allocation Becomes New Normal? - November 17th, 2009
- Very Long-Term Asset Allocation Results - November 8th, 2009
- U.S. Healthcare Legislation Investment Impact - November 8th, 2009
Capital Gains, Case In Point, Current Market News, Dividend Payouts, equity income, Group Llc, High Yield Funds, Money Flow, Political Parties, portfolios, Possibilities, Primaries, probabilities, Qvm, Richard Shaw, Scenarios, sectors, Stocks to Watch, Tax Changes, Tax Regime, Taxes On Dividends, Wild Card
 About Richard Shaw (http://www.QVMgroup.com)
Richard is a principal of QVM Group LLC, a fee-based investment advisor based in Connecticut with clients across the country. He provides investment coaching to "do-it-yourself" investors, and manages portfolios for those who prefer not to make their own decisions. His investment approach is based on value, asset allocation, benchmarking, expense control, risk management, customizing portfolios to each client's specific circumstances, and regular communication about strategy and performance. The QVM Group team also provides municipal refinance services, strategic business planning and financial analysis service for new ventures, private acquisition analysis, and custom investment research. Richard's extensive experience, includes serving on the Board of Directors of Aberdeen Asset Management PLC (London Stock Exchange: ADN), membership on the Board of Directors of Phoenix Investment Counsel (renamed Virtus Investment Advisors), a U.S. pension manager and investment advisor to the Phoenix Funds (renamed Virtus Funds), as well as serving as Managing Director of a series of offshore investment funds based in Luxembourg. He has led institutional asset management sales and had overall responsibility for management of a U.S. mutual funds broker-dealer. He was a charter investor and member of the Board of Directors of several internet companies, including Lending Tree prior to its IPO. He is a graduate of Dartmouth College. QVM Group LLC is a Registered Investment Advisor. Visit the QVM Group website http://www.qvmgroup.com/QVMinvest/ |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.