A Great Time to Talk About Tax Loss Harvesting

It’s not what you make that matters but what you keep!

This is a great opportunity to talk about tax-loss harvesting.

We’ve just experienced the fastest 30% decline from an all-time high in history. It took only 22 days. “The second, third and fourth fastest 30% declines all occurred during the Great Depression era in 1934, 1931 and 1929, respectively.” – Yun Li, CNBC

That means many investors probably now have positions with significant unrealized losses. This is a great opportunity to harvest those! Continue reading “A Great Time to Talk About Tax Loss Harvesting”

Don’t Let The Tax Tail Wag The Investment Dog

There are a few folks I’ve been speaking with over the last couple months that are interested in working with me but are hesitant to move forward because they don’t want to sell any investments. This is largely due to the large capital gains they have embedded in some of their long-held investment positions.

Before I discuss the potential problem with this line of thinking let me express that (1) I am very sensitive to taxes when managing portfolios and (2) I do manage around concentrated positions with large capital gains when appropriate using a variety of methods (e.g. options strategies).

The problem with this line of thinking is that you’re letting the tax tail wag the investment dog. The best way to illustrate what I’m talking about is with a simple example. Continue reading “Don’t Let The Tax Tail Wag The Investment Dog”