As we gather around the Thanksgiving table, sharing gratitude for the bounties of the year, there's another harvest worth celebrating—one that happens in the world of investing. It's called "Tax Loss Harvesting," a clever strategy that helps investors save money while navigating the ups and downs of the financial landscape. In this special Thanksgiving-themed blog, let's explore the concept of tax loss harvesting and appreciate the financial feast it brings to the table.
Understanding Tax Loss Harvesting:
Just like how farmers carefully select and harvest crops, investors can choose to harvest tax losses strategically. But instead of fruits and vegetables, we're talking about investments—stocks, bonds, and other financial goodies.
- Selecting the Harvest: Identifying Losing "Crops" Just as farmers look for ripe fruits, investors identify investments that aren't doing so well. These are like the veggies in the garden that need a little extra care.
- Bringing in the Bounty: Selling and Reinvesting Once you've found the not-so-happy investments, it's time to sell them. This is like gathering the harvest and trading it for something better. The money you get can be reinvested, just like planting new seeds for future growth.
- Feasting on Tax Savings: Offsetting Gains The special sauce of tax loss harvesting is that you can use the money from the "losing harvest" to offset gains. It's like adding a pinch of seasoning to your Thanksgiving feast—making it even more enjoyable!
Why Give Thanks for Tax Loss Harvesting?
- A Financial Cornucopia: More Money in Your Basket By using tax loss harvesting, you get to keep more of your hard-earned money. It's like having an extra helping of mashed potatoes on your plate!
- Feast Today, Feast Tomorrow: Long-Term Financial Growth Just as Thanksgiving is about enjoying the present and looking forward to the future, tax loss harvesting sets you up for long-term financial success. You're not just feasting today; you're feasting tomorrow and beyond!
- Giving Back to Your Future Self: Saving for Later Remember, the savings from tax loss harvesting aren't just for today. It's like putting some of your Thanksgiving leftovers in the fridge for a delicious snack later on. You can use those savings in the future when you need them.
As we count our blessings and reflect on the year gone by, let's add tax loss harvesting to our list of financial gratitude. This Thanksgiving, be thankful for the smart strategies that help you grow and protect your wealth. At Wolf Group Capital Advisors, we are always reviewing client portfolios to see if there are opportunities to increase tax efficiency. If you would like to learn more and explore if tax loss harvesting can benefit your personal situation, please feel free to reach out.
So, here's to a harvest of tax savings, a table full of financial abundance, and a Thanksgiving season filled with gratitude and smart investing!
Kevin Ostergaard, CFP®, CIMA®
Senior Financial Advisor
About Wolf Group Capital Advisors
At Wolf Group Capital Advisors, a comprehensive wealth management firm and Registered Investment Advisor (RIA) based in the Washington, D.C. metropolitan area, nothing is more important than the fiduciary responsibility we have in managing your wealth. Taking the utmost care, we focus on providing advice tailored to your specific circumstances. With more than two decades advising U.S. expatriates and non-US citizens employed by international organizations, we are qualified in investment strategies addressing global issues. Empathy and curiosity—combined with our experience in life planning and investment management—enable you to explore a wider set of possibilities that can lead to a fulfilling life you’ve worked hard to attain.
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