With the ups and downs of the current market, it seems obvious to avoid capital gains by taking advantage of any losses that are being held in your portfolio. However, many times these opportunities are overlooked. Further, a case can be made to employ tax managed strategies in all of your investments going forward. There are two basic ways to employ tax management of a portfolio:
- Manage the account to provide low turnover. Usually this means using an investments related to an index or some other “buy and hold” strategy. This only makes sense if there is not another alternative strategy that will provide better return after taxes are taken. The important point here is to be sure to do the analysis.
- Manage the account in order to reduce capital gains by realizing offsetting losses or postponing realizing gains during each taxable year. The important point here is to not wait until you get your tax statement for the account at the end of the year, but pay attention throughout the year.
Crosswind Advisory is always sensitive to the affect of taxes on your portfolio and work with you to minimize them. In addition, we offer a spectrum of mutual funds, ETFs and separately managed accounts (SMAs) that are matched to your specific needs.
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