Plunge In Price Of Oil Highlights Differences Between Wealthy And Affluent
Wealthy Can Diversify Concentrations In Oil Stocks With Minimal Tax Effect
It’s really a tax issue and not a hedging issue.
As a result of the recent plunge in the price of oil, more investors in oil companies are interested in hedging techniques. Whenever there is a sharp drop in the market in general or a specific sector, interest usually increases in hedging and protective strategies to mitigate the decline. Recent Google search trends indicate more and more people searching for terms such as “hedging” and “protective techniques.”
Seeing increased interest in such searches is no surprise as unanticipated drops in the market or specific sectors usually triggers this type of interest, according to Todd C. Ganos, Forbes online contributor and author of a free Special Insider’s Report on No-Tax/Low-Tax Diversification of Wealth Concentrations.
Ganos, who recently published the Special Insider’s Report, which details tax strategies that the wealthiest families use to minimize the tax effects when diversifying wealth concentrations, is both optimistic and cautionary about the increased interest.
“While it is always good to see more people interested in portfolio risk reduction strategies in general, such interest often arises because an investor has a concentration of wealth in the asset that is declining in value. Investors often have a concentration of wealth because they feel trapped by unrealized capital gains and tax liability should they sell to diversify. It’s really a tax issue and not a hedging issue.”
He goes on to say, “This is where the difference comes in between the wealthy investor and the affluent investor. The dollar amount of tax savings seen by the wealthy investor is far more than the cost to execute the tax planning to diversify a wealth concentration. The wealthy investor can move from wealth concentrations to diversification via tax planning. But, the dollar amount of tax savings seen by the affluent investor typically does not overcome the cost of planning. The affluent investor’s choices are limited.”
The Special Insider’s Report on No-Tax/Low-Tax Diversification of Wealth Concentrations, available at www.ReduceMyCapitalGainsTax.com, is intended to illustrate how the wealthiest families minimize taxes on a business sale as well as other transfers of substantial assets, including publicly traded stock, pre-IPO stock, and real estate.
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