Investing Insights Tax-Loss Harvesting Isn’t Just for Downturns. Here’s Why
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Nov 21, 2025 Amy Arnott, a portfolio strategist at Morningstar, dives into tax-loss harvesting and rebalancing strategies. She cleverly explains how tax-loss harvesting can save money even during market upswings. Arnott highlights sectors where investors might find losses to offset gains and warns against the pitfalls of the wash-sale rule. She also discusses the importance of rebalancing portfolios, especially as market conditions shift over time, to manage risks effectively. Tune in for her expert tips on fine-tuning your investment strategy.
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Harvest Tax Losses In Taxable Accounts
- Do tax-loss harvesting by selling holdings with unrealized losses in your taxable brokerage account.
- Use realized losses to offset up to $3,000 in ordinary income, current-year capital gains, or carry them forward.
Use Taxable Accounts, Not Retirement Plans
- Avoid doing tax-loss selling inside IRAs or 401(k)s because trades there don't create tax losses.
- Keep tax-loss strategies confined to taxable brokerage accounts where gains and losses matter.
Strong Market Still Has Hidden Losers
- Broad market gains can hide many individual losers depending on purchase timing and price.
- Look for losses among holdings bought at higher prices or in less-boosted sectors.