TY - JOUR T1 - Tax-Efficient Investing Is Easier Said Than Done JF - The Journal of Wealth Management SP - 9 LP - 15 DO - 10.3905/jwm.2001.320398 VL - 4 IS - 1 AU - Robert H. Jeffrey Y1 - 2001/04/30 UR - https://pm-research.com/content/4/1/9.abstract N2 - In this article, the author, one of the co-authors of a seminal article in the tax-sensitive investment field, explains why tax-efficient investing is much easier said than done. He starts with a short history of tax-efficient investing, identifying the significant drag associated with taxes. He then returns to the thesis that keeping turnover low is critical to avoiding unnecessary taxes, arguing that many managers may be overstating their ability to create after-tax alpha. He bases that contention on two real-life experiences, which he recounts and where managers proved unable to deliver. He then turns to the issues of style, suggesting that value may not be suitable to taxable investors, and diversification, suggesting that it may only come at a great cost to investors, in particular pointing to the risks associated with the creation of a stable of specialized managers. He concludes with the proposition that a taxable investor should forget about benchmarking and tracking error considerations. ER -