You Won the Battle on Investment Fees. You’re Losing the War Against Taxes.

The Wall Street Journal

Jason Zweig

Article

3 Pages

Wall Street Journal argues that investors have largely won on fund fees, but taxes remain a much bigger drag. The article cites new research showing U.S. stock market returns fell from 10.5% pretax to 7% after federal taxes from 1926 through 2025.

Key Takeaways

Taxes Beat Fees: A total market index fund can cost just 0.03% annually, while federal taxes cut historical returns by about 3.5 percentage points.
After Tax Matters: From 1996 through 2025, U.S. stocks returned 9.9% pretax but less than 8.3% after tax, reducing final wealth by 36%.
Income Funds Bite: YieldMax MSTR returned 41.1% pretax annualized through 2025, but only 16.3% after tax, showing how payouts can erode results.
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