Tax Break

Tax loss harvesting: how and why to do it

February 17, 2012

In a groundbreaking 1998 behavioral economics study,  Berkeley professor Terrance Odean found that as a group, investors tend to hold on to their losers, hoping for a rebound, and instead sell their winners.

That’s often a bad idea, and not just because losers may keep descending. Hanging onto those losers also keeps you from taking advantage of some smart tax planning.

In this video, Reuters Personal Finance Editor Lauren Young explains how to lock in your investment losers to reduce what you owe Uncle Sam.

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