In a year where nothing seemed to work on Wall Street, investors still have a rare opportunity to make the best of a bad situation by tax-loss harvesting their bond portfolio.
Bond holders don’t do much tax-loss selling in an ordinary year. It is typically done at the end of the year and involves investors selling losing stock positions to offset taxable gains. But with this year’s 12% drop in the Bloomberg U.S. Aggregate Bond Index, investors shouldn’t ignore the fixed-income portion of their portfolios.