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

When market downturns happen, 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 you having to take extra investment risk. That’s the win-win.

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.