What are the advantages of hiring a money manager rather than investing in mutual funds?
Control. You can tell your manager if you want to exclude “sin stocks,” such as those in the tobacco, gambling, and liquor industries. In addition, you can advise your manager to avoid companies where you have a conflict of interest or where you already have sizable holdings.
Tax planning. You can instruct your manager to hold onto your stocks for the long-term so you won’t face annual tax bills for capital gains. At your direction, your manager may be able to take losses, if you need to offset taxable gains.
Moreover, you can decide which holdings should be held inside a tax-deferred retirement plan and which holdings belong on the outside, to maximize your overall aftertax return.
For more information on working with money managers, go to The Money Management Institute’s Web site, www.moneyinstitute.com.
