Are Taxes More to Fear Than a Market Decline?

BOSTON (TheStreet) -- Investors are jittery about the stock market's decline to a 10-month low earlier this month, and many are piling into bonds. But they may have more to lose in the form of higher taxes. Although a dip in stocks is immediately felt in investment and retirement funds, new and increased taxes could inflict a far-reaching and long-lasting erosion of assets. Is, for example, a temporary 25% drop in stock prices any better or worse than having profits slashed in equal proportion by the tax man? "Market cycles come and go but tax rates can stay for a very long time," says Ron Florance, director of asset allocation and investment strategy at Wells Fargo's(WFC) private-banking unit. "One of the things investors need to look at is that what you earn in your portfolio isn't really that important. What you earn after you pay your taxes is what determines your lifestyle." To read the rest of this article, click here.