Our own Chief Investment Officer Mark Keating, CFP® AEP® was included in yesterday’s Wall Street Journal article “How to Invest When Both the Stock Market and Bonds Are Falling”.
Describing how tax loss harvesting works, the reporters wrote: Mark Keating, a financial planner in Sebastopol, Calif., says he recently sold a client’s shares of the Vanguard Total Bond Market Index Fund ETF, which is down roughly 10% year to date. In its place he purchased Vanguard California Intermediate-Term Tax-Exempt Fund Admiral Shares.
“By doing this he was able to harvest a 10% loss for the client, which will reduce their 2022 taxes. Finding such an upside to losses may also have psychological as well as financial benefits, Nobel laureate and behavioral economics pioneer Richard Thaler said. “Harvesting is such a nice term. Much better than ‘formally accepting the fact that this investment was a mistake,’” he said.