Values Added

A Non-Obvious Benefit to a Down Market

It’s upsetting when the stock markets are down and our investments have lost value. Certainly, it’d be better to have not lost the money in the first place, but given that we have, there are a few non-intuitive benefits. I was working with a client recently who should sell some old investments since the funds charge higher fees than some good alternatives. In a good year that might trigger capital gains taxes. One major advantage of a down market is that when you sell some investments to buy better ones, if they have lost value there are no taxes due (under normal circumstances). Even better, if you itemize the dedications on your taxes then, under most circumstances, you’ll be able to deduct the losses.