Some investors screen their investments in order to hold only the assets that are associated with products or services that reflect or do not conflict with their belief systems. They may therefore sacrifice return for peace of mind. Long-term capital gains are taxed at a maximum rate of 20 percent. Capital distributions are not taxable but alter the basis that is used in capital gains calculations. As evidenced by table 1-1, taxable income falls within the 28 percent marginal tax bracket.
Insurance companies are in the business of selling protection from pure risk.
Decisions made by a group tend to be riskier than individual decisions.