Tax-Loss Harvesting: Opportunities and Obstacles
Written by Andrew Hunt
Written by Jason Hiley
Second quarter has come and gone, along with the usual mixed bag of “what next?” news. There were the typical ugly players such as potential trade wars and rising interest rates. There were also the usual market darlings, such as this quarter’s big, bold tech stocks. Each in their own way can tempt you to cringe or veer off-course.
We hope you’ll avoid reacting to recent news. At the same time, we understand how hard that can sometimes be. No matter how often we’re faced with uncertainty or how well we think we’ve prepared for it, new threats and opportunities have real ramifications in our lives; it’s natural to wonder whether “this time” they should also influence our investment decisions.
The decades and volumes of robust evidence advising our approach still suggests otherwise. To best pursue your personal goals, we must continue to consider the latest news within the greater context of how global capital markets have delivered their eventual returns.
Our rational selves understand this. But, as Georgetown University finance professor James Angel observed in a recent Wall Street Journal article, “One of the open secrets of the financial-services world is that we’re also in the entertainment and gaming industry.”
Building and maintaining a globally diversified portfolio is usually neither fun nor entertaining. It’s mostly just boring to stick to a well-crafted investment portfolio, year in, year out.
Here’s a fun stat to remember next time you’re tempted to bet against the proverbial house by guessing where the market is headed next (emphasis ours): “Since 1928, the [U.S.] stock market has risen on 54% of days, 58% of months and 73% of years.”
This comes from the same WSJ article, along with this important observation: “The distinction between an investment and a gamble lies in the odds of success.”
Our goal is to keep those investment odds in your favor. It may not be as entertaining, nor is success guaranteed, but all evidence suggests you’re best off investing in the house and its expected favorable outcomes, rather than placing concentrated bets on every hand played.
As always, please be in touch any time we can help you explore current market returns as they relate to your financial goals – or with anything else that may be on your mind. One sure bet you can make: We’re always happy to hear from you!