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