Course 505:
Long-Term Investing's Tax Advantage
In this course
1 Introduction
2 The Toll Taxes Can Take
3 Can Good Trades Offset Taxes?
4 Long-Term Investing's Advantages

As we discuss in another session, taxes are one constraint to consider when building a portfolio. Taxes are also one quantifiable advantage of long-term investing. There has always been an advantage to holding stocks long term, but the tax law changes in 1997 made that edge even sharper. Long-term investors, defined as those who hold a stock longer than one year, now enjoy a capital-gains tax rate of 20%. Short-term traders have their gains taxed at 28%. That may not sound like much of a difference, but it is.

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