December 2022 is capping off a poor year for investors worldwide. With stocks and bonds falling in tandem thanks to high inflation and rising interest rates, even investors holding balanced portfolios suffered higher-than-expected losses. Aside from some hedge funds and commodities, few assets stayed in the green.
Still, every situation has a silver lining, and the 2022 bear market is no different. For investors enduring unrealized losses, there’s a way to potentially offset future capital gains and even some of your income tax before the year is up. Your paper losses have a hidden upside.
The method is called tax-loss harvesting, and when implemented correctly it can save you money and boost your after-tax returns significantly. However, implementing a tax-loss harvesting strategy can be complex and fraught with legal considerations. Here’s what the experts have to say about it.
This post originally appeared at U.S. News & World Report.