Harvest Tax Losses

Tax losses from securities held in taxable accounts can be used to offset any gains realized year-to-date. Losses in excess of current year gains are carried forward, and can be used to offset future capital gain income. Due to the upcoming election, we probably face an increase in tax rates. Therefore, current year losses may prove to be a valuable asset for use in 2009 and later years.

 In order to maintain equity exposure, you can purchase similar stocks, mutual funds or ETFs which, within IRS guidelines, can be a substitute for existing holdings.

Any actions taken should be commensurate with your overall investment strategy and risk tolerance.