Seeking Alpha

"The market environment is more important than the tax environment," says WisdomTree's Jeremy...

"The market environment is more important than the tax environment," says WisdomTree's Jeremy Schwartz, brushing off concern about a probable hike in the dividend tax rate in 2013 by pointing out the large amount of these assets held in tax-insensitive accounts. Sam Stovall, however, notes the S&P's highest yielding sectors have been the worst performers since the end of September.
Comments (8)
  • High yield debt issuance has been nothing short of spectacular two years running. Will the tax increases crush the sector? I say no as well. But I also agree we are still seeing a meaningful move towards the low debt/pro equity economy...and that this has been going on for some time. There are billions of barrels of oil in Saskatchewan which soon will start flowing South. It's hard to imagine this not having a massive net positive on the economy going forward...it's just that the high tax/crazy benefit States are still taking so much of this wealth I fail to see how growth and "high yield" can sustain themselves well in this low growth norm.
    10 Nov 2012, 11:11 AM Reply Like
  • Stovall & Schwartz comments are not inconsistent near term. There may be some re-setting of cost basis. That may make some sense for many investors, but there is an old investment saying I learned as a young man..."Don't let the tax tail swing the dog". And, there is nowhere else to go for many investors particularly those retired or near retirement for their equity portfolio component. Those investors that want growth exposure are already there.

     

    All said, once the emotions die down, dividends have been a key component of the phenomenal returns of common stocks since 1900. That covers all kinds of tax environments.
    10 Nov 2012, 11:34 AM Reply Like
  • If the tax environment is so unimportant then why does the governments constantly try to create incentives through tax benefits?

     

    Another self serving nonsense article.
    10 Nov 2012, 01:17 PM Reply Like
  • this equates to mispricing and opportunity

     

    P

     

    Don't Blame Me I voted for Romney
    10 Nov 2012, 01:24 PM Reply Like
  • Last year my dividend was $350. If tax rate goes up by 5% that is increase of $17.50. If I go to the Starbucks with my friend I pay more than that for coffee that I can not pronounced the name and make me put 10 ponds of body fat on me.
    10 Nov 2012, 04:26 PM Reply Like
  • Most of my dividend paying stocks are in my IRA and as I withdraw them, they are taxed at my marginal rate of 25%. If they were held in a non-IRA account they would be taxed at 15%. All dividends should be taxed the same - at the marginal rate. Same for capital gains. Why should a dollar earned in wages be taxed higher than dollars earned passively? Tax all income equally and extend FICA to the first $xx,000 from ALL sources of income, not just wages so people like Romney and Steve Jobs ($1/year salary) contribute to Social Security along with the cops, janitors, soldiers, middle managers, etc. .
    10 Nov 2012, 05:48 PM Reply Like
  • Frosty its called the Flat Tax, you could do your taxes on a postcard, The lobbyists, tax prepares, politicians, and accountants do not want it. It makes things fairer and simple with no loopholes. One year I believe I heard 35 billion $ was spent on Tax prep and filing.
    10 Nov 2012, 08:09 PM Reply Like
  • The tax issue is a side show. DVY has underperformed SPY year-to-date and on a 12 month rolling basis simply because high dividend stocks have been terribly over-valued. The prices have been run up by people seeking safe yield in all the wrong places. An investment idea is only a good one if you can get a good entry point. Over paying for a particular sector and then consoling yourself with long run statistics is a sure way to lose money or underperform.
    13 Nov 2012, 04:09 PM Reply Like
DJIA (DIA) S&P 500 (SPY)