It's September – and that means it's prime time to think about maximizing after-tax returns as the year winds down. Even after investors' bout with volatility in the late summer, it's been a strong year for stocks overall, with the S & P 500 up nearly 18% in 2024. Further, even as exuberance around artificial intelligence has driven outsized returns for Nvidia and the tech sector, other areas of the market have perked up: Financials are toting a nearly 20% gain in 2024, while consumer staples are up about 18%.
Of course, there may be a price to pay for that performance: Uncle Sam will want his share of taxes. "We are constantly thinking about taxes all year, but it ramps up in the fourth quarter," said Nathan Hoyt, chief investment officer for Regent Peak Wealth Advisors in Atlanta. "We want to be proactive in a market that has a lot of uncertainty.
" Here are a few steps that could help you hold onto more of your portfolio's returns this year. Sell your laggards and get rebalanced Enough of the year has passed that investors can take stock of which positions have been suffering in 2024. There's a silver lining: By selling big losers in your taxable account, you realize capital losses, which can offset capital gains elsewhere in your portfolio and help trim your tax bill.
"What tax loss harvesting can do is mitigate that feeling of loss in times of downturns or when certain investments don't perform as well as you had hoped by providing some tax savings," said Joel Dickson, .