Tax-Aware Investing
A Win for Your Net Return
Who doesn’t want a higher net return on their portfolio without taking on more risk? Pro-active, tax-aware investing can maximize your net return after taxes without adding risk. That’s what we call a win-win.
To get you there, we create portfolios focused on your after-tax results. We analyze your entire asset base for opportunities to maximize after-tax return, including placing tax-inefficient assets in tax-exempt accounts and strategically realizing gains and losses.
We help offset your tax bill by actively managing your investment strategy in three main ways, so you can get a higher net return without additional risk:
Asset location
Where your investments reside — in taxable or tax-advantaged accounts — can significantly affect your total after-tax return. The challenge is knowing what to put where, and how to make withdrawals strategically from the various accounts to maximize tax-efficiency.
Tax-loss harvesting
Especially during market downturns, we employ tax-loss harvesting. This involves selling specific stocks at a loss and using that loss to offset capital gains taxes in the future. The investment is replaced by a similar one, maintaining optimal asset allocation and expected returns.
Over time, lower investment taxes mean you end up with a higher net return, without having to take on extra investment risk. That’s the win-win.
Reaping the Benefits of Tax-Loss Harvesting
Find out how we implement this strategy in client portfolios, and what we are mindful to avoid.
Tax-aware manager selection
When selecting what to invest with whom, we focus on asset managers who make it a point to limit investment taxes, either by not trading as often to avoid short-term gains and/or using tax-loss harvesting. We’ll only recommend a manager if we’re confident that their potential to generate above-market return outweighs the likely tax burden.
A Tax Tune-Up for Your Portfolio
Get pro-active about taxes on capital gains and investment income. Watch our short video on Tax-Aware Investing.
