With the looming “fiscal cliff” on the horizon, there is no doubt that investors are sitting on the edge of their seats. And if the President and Congress cannot agree on a plan to stop automatic tax increases set for December 31, some of those investors may be tempted to make hasty decisions in order to take advantage of current tax rates.
But financial advisers warn that “any time you make a decision purely for tax reasons, it has a way of coming back and biting you.”
A recent article in the New York Times, “With Shifts Possible in U.S. Tax Policy, Beware of Sudden Moves,” discusses some of the top areas where short-term trading decisions based solely on taxes could end up hindering long-term investment goals. The article focuses on how to deal with appreciated stock, municipal bonds, real estate and insurance annuities.
The most thought provoking advice offered by the article, however, is to wait and see. Restraint now could prevent regret in the future.
References: The New York Times (December 2, 2012) “With Shifts Possible in U.S. Tax Policy, Beware of Sudden Moves”
For more information regarding taxes visit my Wichita Kansas Estate Planning Attorney website