At Winthrop, we help our clients live life in the moment while boldly exploring and imagining possibilities for their future. Our approach enables us to explore every aspect of your life so that we can design a big-picture plan and investment solutions that balance practicality with opportunity.
Whoever you are, and wherever you are on your journey, our multi-generational team has all the tools and experience to help you pursue your financial goals—and live your life to the fullest.
From fast-growing startups and closely held family businesses to multi-generational enterprises, we will help empower you to operate more efficiently day-to-day, while laying a foundation for navigating the future.
We work closely and collaboratively with our endowment and non-profit clients to provide investment programs and hands-on portfolio management services pursuing global opportunities while seeking to ensure alignment with key business objectives.
We’re committed to seeking out and sharing the trends influencing markets and the outlooks that might inform our investment approach. In an industry like ours, being open to multiple viewpoints and fresh perspectives is a critical part of how we add value, and help our clients imagine all the possibilities.
In the world of finance, things change fast and there’s always more to learn. We’ve created a series of tools that will help you stay educated and keep you informed about the things that matter most.
Client Questions | April 01, 2021
Revised July 19, 2023, Originally Posted April 01, 2021
We are moving into Spring, which means (hopefully) warmer weather and that we are getting closer to Tax Day. The IRS recently announced that the tax filing due date for individuals was extended to May 17, 2021. IRS Commissioner Chuck Rettig commented that, “even with the new deadline, we urge taxpayers to consider filing as soon as possible.” Individuals can also postpone federal income tax payments to May 17th without penalties and interest. Note that the deadline extension does not apply to estimated tax payments that are due on April 15, 2021 or state tax returns. Estimated payments are still due on April 15th and state filing and payment deadlines vary. Please consult with your tax professional with any specific questions regarding your tax returns.
Since we are approaching tax season, we thought it would be helpful to review the potential benefits of tax-loss harvesting. Tax-loss harvesting is achieved by selling an investment with a loss and immediately purchasing a different security with similar (but not identical) exposure. The key points are:
We periodically look for opportunities to execute tax-loss harvesting trades in actively managed portfolios. Typically, the best instances occur during significant market declines – the most recent best examples are December 2018 and February/March 2020. In 2022, we have started to tax loss harvest positions when appropriate. If the market declines further, we will increase the tax loss harvesting. Remember that no strategy assures success. All investing involves risk, including loss of principal.
Having a dynamic process and the proper technology to tax loss harvest is critically important as market declines occur frequently. The S&P 500 has averaged a peak-to-trough decline of about -15% each year since 1928 despite producing a total annualized return of +9.7% over the same period. (Source: Bloomberg). Historically, equity markets have recovered from recessions and downturns; however, past performance is no guarantee of future returns. It is important to consider your own risk tolerance, financial circumstances, and time horizon when investing. When the inevitable market decline happens, we try to make lemonade out of lemons by tax-loss harvesting and rebalancing portfolios. These activities can provide significant benefits by capturing losses and/or reallocating to more attractive securities. Rebalancing a portfolio may cause you to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
At Winthrop Wealth, we apply a total net worth approach to both comprehensive financial planning and investment management. We believe financial planning drives the investment strategy and provides a roadmap to each client’s unique goals and objectives. The comprehensive financial plan defines cash flow needs, is stress tested for various market environments, seeks to optimize account structures, considers tax mitigation strategies, and periodically evaluates financial risks as circumstances and/or goals change. The investment management process is designed to provide well-diversified portfolios constructed with a methodology based on prudent risk management, asset allocation, and security selection. It is important to remember that no investment strategy assures success or protects against loss. Asset allocation does not ensure a profit or protect against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
All indexes mentioned are unmanaged indexes which cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. Past performance is no guarantee of future results.
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broader market value of 500 stocks representing all major industries.
Financial planning is a tool intended to review your current financial situation, investment objectives and goals, and suggest potential planning ideas and concepts that may be of benefit. There is no guarantee that financial planning will help you reach your goals.
Likewise, it is important to remember that no investment strategy assures success or protects against loss. Asset allocation does not ensure a profit or protect against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. All investing involves risk which you should be prepared to bear.
Rebalancing a portfolio may cause you to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your
specific tax situation with a qualified tax advisor.