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So far, 2013 has been a solid year for most investors.  Well diversified portfolio’s (in things other than all stocks) should be up 10-15% or more year-to-date.  As we pointed out recently, most of these gains have come from the stock side of the allocation as bonds have been flat or negative.  Yes, bonds can actually lose value, especially when interest rates rise.

However, depending on how granular your allocations are in your NON-retirement accounts, you may have holdings that have declined in value this year.  Gold is down nearly 25%, commodities off almost 15%, and emerging market stocks down almost 10%!  If you sell a holding that has declined in value compared to what you purchased it for, you are able to sell it for a loss.  That loss would offset any securities you sell. The loss can be carried forward to future tax years if not used in the present tax year. There is no limit to how much you are able to carry forward.  However, if you reinvest the proceeds, be careful of the wash sale rules and invest in something a little different than what you sold.  

Tax-loss harvesting is a wonderful tax planning tool to make a positive out of a bad situation!  The end of the year is coming fast – be sure to take a look at your holdings for these opportunities.



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