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Investment Strategies and Taxes.

Why might investment strategies designed to avoid taxes contradict the principles of efficient diversification?

Please discuss in detail and provide 2 quality references.

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Investment Strategies and Taxes:

Investment strategies are a set of rules, procedures or behaviors which are designed to offer guidance for an investor's selection of an investment portfolio. An investment strategy that one selects will depend on his or her personal endeavor such as cash, gold, utilities, dividend-payers, and vice. Despite the fact that tax laws are complex and are constantly changing, an individual have the opportunity of increasing their tax fund and minimizing their tax liabilities (Patchett & Horgan, 2011).

Some tax strategies are usually designed for immediate implementation and if used effectively they assist on tax saving on the current year. Some of the tax strategies which may be employed in tax deduction include the Bring Forward Your Tax Deductions, using the capital gains tax discounts, setting up a company, diverting income and protecting an individual's asset, using tax offsets and rebates, and self management of an ...

Solution Summary

The solution discusses investment strategies and taxes.