Market Volatility & Tax-Loss Harvesting

As many of you know there has been more market volatility the last couple of weeks due to inflation fears and geopolitical events (i.e. Russia’s invasion of Ukraine).  As always, your HoganTaylor Wealth advisors are monitoring the impact on your investments.  We believe it’s crucial during times of heightened emotion to stay consistent to the investment process and financial plan we have set together. 

To quote a recent Dimensional article title Navigating Geopolitical Events: “Geopolitical events like military or economic conflicts can affect stock markets in many ways. These events are normally widely followed by investors. We believe current market prices quickly incorporate expectations about the effects of these events on economies and companies. Our investment approach centers on using information in current market prices rather than trying to outguess them. If markets stay open and continue to function normally, we generally continue investing our portfolios according to our usual process. We believe that the most effective way to mitigate the risk of unexpected events is through broad diversification and a flexible investment process. This philosophy applies to other crises, like natural disasters, social unrest, and pandemics. “

Secondary to staying the course, this is a time when we look for opportunities to rebalance as markets continue to move as well as continue to look for ways to tax loss harvest.  Tax loss harvesting is a strategy of realizing losses on certain holdings in a taxable portfolio to offset taxable gains and regular income.  This is just another strategy to help increase returns over the long-haul, by keeping your future tax bills lower. 

As always if you have any thoughts, questions or would like to discuss further please reach out to your HoganTaylor Wealth advisor.