Tax-Aware Long-Short strategies defer capital gains
Wealth managers are increasingly utilizing Tax-Aware Long-Short strategies to harvest losses and defer capital gains taxes in a high-performing stock market.
The argument
The guest explained that the strategy, now representing over $150 billion in assets, acts like an interest-free loan from the government by netting losses and gains to push tax liabilities into the future, allowing the deferred capital to compound at the portfolio's rate of return.
The thesis, stress-tested
✓ What validates it
- ✓Continued growth in assets under management (AUM) for tax-aware investment vehicles
▸ Risks discussed
- ▸Requires active management and sophisticated tracking to execute effectively
- ▸Changes in federal tax laws regarding loss harvesting or capital gains could diminish the strategy's efficacy
Hear it yourself
"With stock markets near record highs, wealthy investors are running out of loss-making investments to help offset their tax bills. To fix things, wealth managers are using an investment strategy called TaxAware Long Short, a strategy now worth over $150 billion."
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