Be strategic when realizing tax losses

Columbia Threadneedle Investments
By November 12, 2021 10:42

Be strategic when realizing tax losses

The routine for many investors is to harvest losses in December. But end-ofyear harvesting could mean missed opportunities.

There are many possible reasons why investors decide to harvest tax losses at the end of the year. Perhaps they take pride in their ability to select stocks, and they don’t want to regret bailing out too early. Or that it just doesn’t feel “right” to sell a security for a loss during the promise of the new year. But when December rolls around, they’re out of patience and their frame of reference switches: it feels like a good time to claim the tax deduction of a realized loss. The most common reasoning behind December loss harvesting is based on emotion and simple convenience, rather than strategic thinking.

Yet for a taxable investor, the value of a loss harvested in December is no greater than the value of a loss harvested in January or any other month. In fact, December has historically been one of the worst months to harvest losses:

Asset Manager

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Prosper van Zanten
Head of Benelux Distribution
Tel: +31 (0)2 262 4022

Website:www.columbiathreadneedle.com/nl

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Columbia Threadneedle Investments
By November 12, 2021 10:42

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