Unsubscribe

Confirm you would like to unsubscribe from this list

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

TERMS AND CONDITIONS OF USE

Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.

Disclaimers

Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.

Suitability

No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.

Termination

You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Decline

Give Us a Call

Fund Operations
800.847.0200

FIND ANOTHER CONTACT
A student looking through a large textbook
Investment Tactics

The First Law of Investing

Jan Blakeley Holman, CFP, CIMA, ChFC, CDFA, CFS, GFS
Director of Advisor Education
23 Apr 2021
3 min read

There are only three ways to earn returns; interest, dividends, and capital appreciation.

In 2004, Congress designated April “Financial Literacy Month”. In celebration of financial literacy month, this is the first of four articles that focus on the four laws of investing.

In 1650, François de la Rochefoucauld wrote that “the only thing constant in life is change.” And Rochefoucauld wasn’t alone. Even though it predates Monsieur de la Rochefoucauld by over 3,300 years the Code of Hammurabi (now on view at the Louvre) said the same thing. While I didn’t know François, I wasn’t in the room when the Code was hammered into the stone, and while I don’t agree with many of the Code’s controversial 282 rules, I do know that throughout the ages, many of the world’s greatest thinkers have told us that, in life, change is a given.

On the surface, the same can be said of the investment process, where change and cyclicality are unrelenting. Markets go up and markets go down, economies crest and economies recede, interest rates move higher and interest rates move lower. Yet, amid all of the change in the investment world, four key principles have always remained the same. I call these the four laws of investing.

The first law of investing
There are three ways an investor earns an investment return: interest, dividends, capital gains, or a combination of the three.

Interest
Bank savings accounts, certificates of deposit (CDs) and bonds generate interest. Investors often choose these investments when they are interested in knowing exactly how much they are going to earn on some regular basis (monthly, semi-annually or annually).

Dividends
Stocks, stock mutual funds and ETFs generate dividends. Dividends are attractive to investors because they are a form of current income and offer the potential to increase in the future. At the same time, dividends are not guaranteed and in return for assuming that risk, investors hope to be rewarded with higher dividends and the expectation that the underlying investment will appreciate in price over time.

Capital Appreciation
Investors who want their investment to grow in value choose investments like stocks, stock funds and ETFs that offer capital appreciation. To benefit from an investment that has increased in value, an investor must realize the gain by selling the investment for more than the purchase price.

In addition to choosing the type of desired return, identifying the investment options that produce said desired return, and choosing the investment, investors must also choose the account in which the investment will reside.

Asset Location
Asset location refers to the place an asset (investment) is held. Asset location affects how income or gains from the investment are taxed. Because of that, in identifying the investments that have the potential to generate the type of returns they are seeking, an investor must also be strategic about where each investment will reside.

For example, let’s say an investor is interested in buying shares of a company that she believes has significant appreciation potential. If she purchases the stock in a taxable account and sells it for a profit, she will receive capital gains tax treatment on that profit.

On the other hand, if an investor purchases the same stock in an IRA account, the tax-treatment will be different. Although she will still make a profit on that particular stock in her IRA account, she will not receive the favorable capital gain tax treatment she received in her taxable account. Instead, all of the distributions she takes from her IRA, that have not been previously taxed, will be included in her taxable income, and taxed as ordinary income in the year the distribution is received.

Understanding investment returns and asset location are two of the most important considerations an investor must make. Once they make those decisions, they need to understand how to take full advantage of their investment returns.

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.
Subscribe

More Insights

Fixed Income

The Changing Tides within Fixed Income Liquidity

Portfolio Manager & Managing Director Christian Hoffmann discusses the factors impacting liquidity in the fixed income markets and the squeeze we see today.
Advising Clients

When it Comes to Investing, It’s Not Over Until the Full-Bodied Lady Sings

Finally, the answer to the often-asked question, "How is Investing Like Opera?"
Advising Clients

The Power of “May I Ask You?”

Jan and Hollis share ideas on how to talk to a client, family member or friend who's experienced a heart-breaking life-event.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.
This field is for validation purposes and should be left unchanged.
Feedback