It's that time of the year again, and apple picking and pumpkin patches not only usher in traditional fall routines, they also signal that it's time for an annual review of potential tax losses you can harvest from your investment portfolio.
And you know, just as farmers come together to bring in the fall harvest before winter kicks in, prudent investors should take the time to review their portfolios for opportunities to harvest tax losses this season.
Now, for some of you out there, the idea of "harvesting" losses might seem counterintuitive.
That's because when we think of harvests, we tend to think of taking gains, not losses, right?
Well, while this point may be relevant in most situations, the truth is that a harvest can also happen when you act to avoid leaving money on the table.
Indeed, the key to growing and preserving your wealth isn't just about how much you make, it's also how much you keep.
That's why, just as farmers harvest their crops to reap the benefits of their sewing efforts, investors "harvest" losses to minimize tax expenses.
And so, by realizing (or "harvesting") losses, you can offset taxable gains elsewhere in your portfolio and avoid paying Uncle Sam any more than his fair share.
With that said, this process isn't just about selling all your losses. Indeed, it involves harvesting those losses in the right accounts, being methodical in your approach, and avoiding common and costly pitfalls that could derail your efforts.
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