Friday, October 3, 2008

Adding an Additional Consideration to my Indexing

During one of my many dull moments at work, I realized that there was another factor that I could easily add to my indexing, other taxable income. In general, distributions are split between capital gains, return of capital and other taxable income. As much as tax rates are higher, marginal rates, for other taxable income, compared to half of marginal for capital gains, I want to see other taxable income. If you don't have more taxable income than your depreciation, then you're not doing a good job of recuperating your capital costs. Question of the day is how do I want to scale this one. Maybe I want to increase the weighting of growth as well since price volatility seems to throw yield around wildly and growth provides a measure of long term stability as well.

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