Tax sheltered investment in securities that may create low or negative income but larger cash – flows Tax-free there is no tax if you buy Treasury securities and there is no local tax; buy municipal – bonds and there is no federal taxes; buy municipal bonds from your state and there are no taxes (fed or state) Investors should attempt to maximize after-tax returns Time Horizon Time is of essence in selecting right investment Product choices are shaped by time remaining for reaching investment goals Classification of various investments into medium-term, and long-term is essential Investor should understand the associated with these investments Investment Return Risk and return are positively related Planner should select products that optimize portfolio return for investor’s desired level of risk Risk tolerance level is generally a subjective measure
Tax sheltered – investment in securities that may create low or negative income but larger cash flows Tax-free – there is no tax if you buy Treasury securities and there is no local tax; buy municipal bonds and there is no federal taxes; buy municipal bonds from your state and there are no taxes (fed or state) Investors should attempt to maximize after-tax returns Time Horizon Time is of essence in selecting right investment Product choices are shaped by time remaining for reaching investment goals Classification of various investments into medium-term, and long-term is essential Investor should understand the associated with these investments Investment Return Risk and return are positively related Planner should select products that optimize portfolio return for investor’s desired level of risk Risk tolerance level is generally a subjective measure
bua450_ch10_investment_planning_strategies_study_guide_sol.docx