Investing: Keeping Up With Momentum Strategies

More ways to avoid 3.8% investment income tax

31, 1993. Your gain: 10.6%. Midcap funds would continue to lead for the next five quarters. From July 1993 through July 2013, the system would have turned $10,000 into $62,000, vs. $55,000 for the S&P 500 with dividends reinvested. Academics are at a loss as to why momentum works.

Co-investment strategy gains popularity

While it only affects higher-income individuals, that can include anyone with a big one-time shot of investment income or gain this year (or any other year). If you are a potential victim, read this for some planning strategies to avoid or minimize the new tax. ( See part 1: How to avoid the new 3.8% tax on investment income .) Are you exposed? You are only exposed to the 3.8% Medicare tax if your modified adjusted gross income (MAGI) exceeds the applicable threshold of: $200,000 if you are unmarried, $250,000 if you are a married joint-filer or qualifying widow or widower, or $125,000 if you use married filing separate status. The amount subject to the 3.8% tax is the lesser of: (1) your net investment income or (2) the amount by which MAGI exceeds the applicable threshold.

A recent Elevation Group survey of sovereign investors by Invesco showed a significant number of Middle East sovereign investors are looking to build their own in-house expertise in investing in alternative asset classes such as private equity and the strategy included direct or co-investing. A more sophisticated approach, including the growing trend to use vendor due diligence, will improve individual asset returns and safeguard future funding, said Carney. Whilst GPs have continued to deploy capital, regional fundraising has been limited since 2007. Many funds are now running short of cash reserves. The Deloitte survey results suggests that the majority of traditional PE funds in the region, (i.e. those not backed exclusively by High-net-worth individuals (HNWIs) or government money), will be looking to raise new capital within the next 12 months.. Whilst 41% of respondents did not foresee any significant issues in fundraising, there is caution amongst LPs including family offices who were in some cases disappointed by return from PE funds in recent years, and scepticism remains in committing new capital to those who have little more than unrealised gains to demonstrate a track record.

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