Making Markets Meb Faber: Taxation and Diversification - [Making Markets, EP.54]
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Jan 31, 2025 Meb Faber, co-founder and CIO of Cambria Investments, shares his insights on taxation and diverse investment strategies. He explains the 351 exchange, highlighting its benefits for tax efficiency in portfolios. Meb also delves into managing concentrated stock positions and the advantages of ETF structures over mutual funds. The conversation covers trend analysis challenges, the importance of diversification, and innovations in fixed income investing. Lastly, he discusses the influence of political changes on investment products, including cryptocurrency ETFs.
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351 Exchange Explained
- A 351 exchange, similar to a 1031 exchange for real estate, allows investors to defer taxes on appreciated stocks.
- This is done by contributing a portfolio of stocks to seed a new ETF, receiving shares of the ETF in return.
Genesis of Open Enrollment 351 Exchanges
- Meb Faber discusses how the idea for open enrollment 351 exchanges came about during a podcast with Wes Gray.
- They realized the potential to simplify a complex process and offer it to a wider range of investors.
Diversify Concentrated Holdings
- If you have a concentrated stock position with significant gains, consider a 351 exchange to diversify.
- Contribute your appreciated stock, along with other assets, to seed a new ETF and receive shares in return.