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How FSG Manages Your Portfolio for Tax Efficiency  Thumbnail

How FSG Manages Your Portfolio for Tax Efficiency

There are a number of ways to describe the stock market when it is down: Bear Market, Correction, Bubble Bursting, Oversold, or Downward Volatility. But have you ever heard the word “opportunity” in unison with the former? Of course, what I am talking about is Tax Loss Harvesting. 

Tax Loss Harvesting is selling a security at a loss in order to reduce your overall tax liability. This can only be done in non-retirement accounts. Losses can be used against any realized gains during that same tax year, or up to $3,000 can be deducted on your income tax return if there are no gains that need to be offset. The key when tax loss harvesting is avoiding the “wash sale” rules set by the IRS. This means you cannot sell a security at a loss and buy it back within 30 days. That would create a “wash sale,” and the loss will be disallowed. Instead, buy a similar security to keep your portfolio and allocation in line. This avoids the wash sale rule by the IRS!

During down markets, it is important to take advantage of every opportunity. We here at FSG scan for Tax Loss Harvest opportunities weekly! We have implemented a trading algorithm in our portfolios that allows us to scan for these opportunities and sell investments for a taxable loss while simultaneously purchasing similar securities. This allows our clients to reduce their tax obligation while not missing out on any potential market recovery. This is done in nearly all of our non-retirement portfolios to benefit our clients as much as possible. Seeing a negative on your statement is never ideal. There are hidden opportunities to be taken advantage of and value to be had even when things seem bleak. 

Tax management can be used as a powerful tool in addition to total returns. Find attached some additional facts and insight into tax management within your non-retirement portfolio. 


Written by: Kyle Cooper

This commentary on this website reflects the personal opinions, viewpoints, and analyses of the Financial Strategies Group, Inc employees providing such comments, and should not be regarded as a description of advisory services provided by Financial Strategies Group, Inc or performance returns of any Financial Strategies Group, Inc Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Strategies Group, Inc manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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