High investment costs are the most reliable predictor of poor investment performance, and investment taxes are often the largest component of such costs. Left unchecked, the performance drag due to taxes can compound to substantial amounts.

While you can’t eliminate taxes, there is some good news for investors: the effect of taxes on performance is largely under your control.

A few principles when selecting your investments can go a long way in reducing the tax drag and increase the efficiency of your savings over time.

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