Last week I wrote about the reasons I think tax-loss harvesting isn’t right for every investor —how its recent popularity has led it to become an overhyped, oversold shortcut to the really difficult work it takes to do it well. And how, contrary to our experience over the past 27 years, many in the industry assume that loss harvesting is a one-size-fits-all solution.
It got me thinking about other things the investment community assumes about tax-loss harvesting but may not really understand. Parametric spends a good deal of time helping advisors and their clients with loss harvesting, so I thought it would be useful to also devote some energy to lore harvesting—gathering some of the things we hear from advisors and investors from time to time and testing them against what we know to be true.
The results appear in the interactive quiz below. I encourage you to give it a try. If any of the answers surprise you, that’s OK—they may surprise many in the industry who are new to tax-loss harvesting or aren’t fully sure how it works. My hope is that, armed with more knowledge, we can all make the right decisions for clients—decisions based not on lore but on good, sound investment science.
Brian Langstraat, CFA, Chief Executive Officer
Brian is responsible for Parametric’s firmwide strategy and organizational development. Since joining Parametric in 1990, Brian has held positions in portfolio management, product development, portfolio administration, marketing, and client service. In 2014 he was elected to the Eaton Vance Corp. board of directors. He earned a BA in economics and sociology from the University of Washington.
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