On our most recent radio broadcast, Dan Haake, CPA and Partner at Hutchins & Haake LLC, joined us to discuss the various tax changes set to occur on January 1st, 2013, if Congress is unable to intervene. With the looming fiscal cliff and the associated tax increases on the table, we discussed potential year-end tax planning strategies as it relates to investments and how Exchange Traded Funds can be excellent tools to help implement these strategies. We also discussed how ETFs tend to be much more tax efficient than mutual funds, a potential benefit that sometimes flies under the radar given the other benefits touted for ETFs – lower cost, more transparency, diversification, etc.
In our weekly ETF spotlight segment, we delved into the oldest and largest ETF (ticker SPY) and explained where it fits as part of a well-diversified portfolio. Given the focus on taxes during the show, we also compared the capital gain distributions (or lack thereof) for SPY to a popular mutual fund. Listen to the full show here.