Taxes are one area of investment management firmly in an advisor's control, unlike the direction of the markets, returns from various asset classes or the savings rate of a client. Investing with full knowledge of tax consequences is critical for portfolio performance, and tax-loss harvesting is one of the most useful tools in an advisor's toolbox. But has the tactic been over-hyped?

"There is less economic benefit to tax-loss harvesting than practitioners believe," says Prof. Kent Smetters of the Wharton School at the University of Pennsylvania. "There is a gulf between how economists think about this issue and how practitioners think about it."

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access