The analytical methods applied to tax-exempt investments cannot always be applied in the same way to investments that are subject to taxation. Taxable investment is complicated by, among other things, timing effects. The deferral of taxes on some investments, versus the immediate taxation of others, produces performance transients--extraordinary after-tax returns that reverse themselves in subsequent periods. These transients have implications for taxable portfolio returns--implications that are not always easy to predict.
Read the Complete Article in Financial Analysts Journal
Financial Analysts Journal
CFA Institute Member ContentPublisher Information
Association for Investment Management and Research
6 pages doi.org/10.2469/faj.v50.n3.70ISSN/ISBN: 0015-198X
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