Investors make `mistake' letting tax implications control decisions

The Ticker

March 10, 2000|By JULIUS WESTHEIMER

"It's a mistake to let tax implications control your investment decisions," says financial planner Alexandra Armstrong. "While taxes have an impact on what your true net returns are, keep in mind that the top tax you'll pay on securities held more than one year is only 20 percent. Don't be afraid to sell and take profits if you think you'd be better off investing that money elsewhere."

"Borrowing against a 401(k) retirement plan can be costlier than it appears," warns Family Circle.

na "While you pay interest to yourself, the money you loan is not compounding, which shrinks your nest egg. The `real' loan cost is how much the money would have earned if it stayed in the plan."

"Make money on other people's vacations," says

ua Family Money.

na It points out that "people now typically take short vacations of four or five days." The article lists these stocks: American Classic Voyages, Carnival Corp., Harley-Davidson Inc., Harrah's Entertainment and Royal Caribbean Cruises Ltd.

"Tax-free municipal bonds usually have better after-tax returns than U.S. Treasury bonds for those in the 28 percent bracket -- or higher. And there is minimal risk on AA or better municipals." (Joan King, investment advisor)

WALL STREET WATCH: "Seventy-five percent of day traders lost money in the last six months." (CNBC-TV survey)

"Conditions are about as good as they can be for small caps. Relative to big caps they have better growth prospects and lower price-earnings ratios." (Personal Finance)

"Selected preferred stocks offer high yields, protection against higher interest rates and easy trading. Adjustable rate preferreds offer the best inflation protection." (Roger Conrad, editor of www.utilityforecaster.com)

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