From Stocks to Bonds: 10 Essential Portfolio Balancing Techniques

5. Tax-Loss Harvesting

Tax-loss harvesting involves selling investments that are at a loss to offset gains in other parts of your portfolio. This can be an effective way to reduce your tax liability while maintaining the overall balance of your portfolio.

While tax considerations shouldn’t be the sole driver of your investment decisions, tax-loss harvesting can be a useful tool in your portfolio balancing toolkit. Just be sure to consult with a tax advisor to understand the implications fully.