Goal and Objectives

Chapter 3 page 26

Is it reasonable for an investor to seek safety of capital and tax minimization at the same time?

It is difficult to achieve these two objectives at the same time. Tax minimization requires investments that do not generate fully taxable returns. Tax minimization would lead an investor to seek out dividends or capital gains as opposed to interest income. On the other hand, safety of capital requires precisely those types of investments (such as T-bills) that generate only interest income.


Post a Comment