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The Silent Tax Drag: How ETFs Offer a Tax-Efficient Edge
The Silent Tax Drag: How ETFs Offer a Tax-Efficient Edge
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Investors obsess over market returns but often overlook the corrosive effect of taxes on long-term wealth. The compounding toll of capital gains distributions, dividend taxes, and other liabilities can silently erase years of careful portfolio construction. ETFs—with their in-kind creation/redemption mechanism—provide a structural advantage by minimizing taxable events.
Strategic holding periods turn short-term gains into long-term capital gains taxed at preferential rates. Tax-loss harvesting offsets gains with deliberate position liquidations. These techniques aren't just for accountants; they're frontline tools for preserving crypto and traditional asset returns.
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