TAX EFFICIENT STRATEGY

[bmessas]

Would you consider developing a tax efficient strategy by adding a constraint on the turnover for example keeping 60% of the portfolio unchanged for one year. Considering short term capital gains are taxed at pretty high level, it could still present an interest even though the return before taxes looks less appealing.

Thanks
Benjamin.

[Frank1 Grossmann]

Sure it would be possible to optimize a portfolio so that it only does small adjustments, but if you for example use a strategy like the US market strategy, then the simplest way to reduce taxation would be to use Futures or options instead of the ETFs as they are 60% taxed as long term capital gain and only 40% short term gain.
I will do an article about an option based version of the Permanent Portfolio strategy later this month.

[Author]

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