Trading Behavior

Four types of equity investors:

trader	trades frequently and recognizes all portfolio returns in the form of annually taxed short term gains. This equity management style may subject investment returns to tax burdens similar to those applied to interest income thereby eroding possible tax efficiencies associated with equities (i.e., deferred capital gains).
active investor	trades less frequently so that gains are longer term in nature, may receive more favorable tax treatment.
passive investor	passively buys and holds stock.
exempt investor	not only buys and holds stocks, but he never pays capital gains tax.