Bond investors lost money. Stocks went up. Financial advisors now want you to sell the bonds that cratered so you can pretend the stock gains never happened when April rolls around.
This is tax-loss harvesting. Rich people have been doing it since the Kennedy administration. Your broker just discovered you might have enough money to make it worth his time to send you an email about it.
The pitch goes like this: yields surged, bond prices tanked, your fixed-income allocation is bleeding, but don't cry about it. Sell now. Lock in the loss. Use it to offset those Tesla shares you somehow didn't sell at the top. Again.
They're telling you not to wait until December because they know you. You'll forget. You'll get busy. You'll convince yourself bonds will come back. They won't. Not before year-end. Not enough to matter.
The article says this is a sizable opportunity. Sizable for who? If you made enough in stocks this year to need bond losses to offset the tax bill, you're not reading headlines about tax strategy. You're paying someone $8,000 an hour to handle this while you're in Aspen.
If you're reading this headline, you probably own three bonds in a target-date fund and you have no idea what your cost basis is. You're not harvesting anything. You're Googling "what does yield mean" and closing the tab when Investopedia loads.
The bond market sold off. Some people will save on taxes. You will not be one of them. But hey, at least now you know the strategy exists, which is almost as good as having enough money to use it.
Photo by Markus Winkler on Unsplash
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