We just finished up another year of harvesting crops here in Iowa. As we head into the end of the year, investors should think about harvesting their portfolio.
There is an old saying, it’s not what you earn but what you keep that matters. You can cut investing taxes by offsetting gains with losses.
Tax-loss harvesting allows you to sell investments that are down, replace them with reasonably similar investments, and then offset realized investment gains with those losses. Harvesting and portfolio rebalancing are also a natural fit. In addition to keeping your portfolio aligned with your goals, a periodic rebalancing provides an opportunity to reexamine lagging investments that could be candidates for tax-loss harvesting.
Ultimately, a balanced strategy and frequent reevaluation to ensure that your investments are in line with your objectives is the best approach.
Thank you for reading.
Mike
This information is not intended to be a substitute for specific individualized tax or legal advice. Individual tax or legal matters should be discussed with your tax or legal professional. Investing involves risk including the potential loss of principal. No investment strategy, including diversification, asset allocation and rebalancing, can guarantee a profit or protect against loss.