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New research reveals that most investors are leaving money on the table. Here's how to cash in on that sizable chunk of change.

This story appears in the May 2007 issue of Entrepreneur. Subscribe »

The fidelity Research Institute--funded, of course, by the behemoth Boston investment company with the same name--recently released a report suggesting that in 2003, only 10 percent of investors took advantage of the tax-loss selling opportunities available to them. Another 23 percent reportedly had no opportunities available that year. So take all those folks out of the equation, and about two-thirds of investors left up to $500 on the table by not doing some tax-loss selling, according to Fidelity's research.

You could quibble with the study's methodology, pointing out that it was a survey of Fidelity brokerage accounts, which may not be representative of the larger population. But then you would be missing the larger point. I believe Fidelity's research and think it might even understate things. And the research points to an investing truth: We should all take a fresh look at our portfolios at least once a year, rebalancing and culling as necessary. Offsetting capital gains against investment losses is a legitimate goal of that process.

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