Tax Drag
InvestingThe reduction in investment returns caused by taxes on dividends, interest, and capital gains.
Example
Example: Consider an investor building a $100,000 portfolio. Tax Drag — the reduction in investment returns caused by taxes on dividends, interest, and capital — directly affects investment strategy and long-term returns. Getting this concept right can mean tens of thousands of dollars in difference over a 20-year period. Model your portfolio with our investment calculator.