Make tax-smart investing part of your tax planning
You can work with a Fidelity advisor, who can explain the benefits of applying tax-smart investing techniques in your managed portfolio throughout the year. Because it's not what you earn, it's what you keep.
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The potential impact of tax-smart investing techniques over time3
As the accompanying graphic shows, employing tax-smart investing techniques over time may have a significant impact on your long-term returns. The longer you apply these techniques, the greater the potential impact.
Past performance is no guarantee of future results
Tax-loss harvesting may offer significant benefits during volatile markets4
As the graphic shows, periods of market volatility, while often difficult for investors, can also create opportunities. Very often the periods of greatest market volatility can lead to the highest number of tax-loss harvesting opportunities, which can help increase after-tax returns when markets recover. In 2019, Fidelity helped generate over $160 million5 in harvested tax losses across clients' Portfolio Advisory Services accounts.The right axis and blue line represent the movements of the U.S. stock market as measured by the Dow Jones U.S. Total Stock Market (Price Index).
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.
For clients who prefer single-asset class strategies, Strategic Advisers employs multiple tax-smart investing techniques proactively to seek to enhance after-tax returns in Fidelity Tax-Managed U.S. Equity Index Strategy and Fidelity Tax-Managed International Equity Index Strategy accounts enrolled in Fidelity® Strategic Disciplines. For taxable accounts in the Fidelity Equity Income Strategy, Fidelity International Equity Strategy, and Fidelity U.S. Large Cap Equity Strategy through Fidelity Strategic Disciplines, Strategic Advisers could also implement tax-smart investing techniques, on a limited basis, consistent with the strategy, although tax management is not a primary goal of these strategies. See the Fidelity Strategic Disciplines Program Fundamentals (PDF) for program details or speak with a Fidelity advisor.
Hypothetical examples assume an initial $1 million investment in a Growth with Income Composite (60% stocks/40% bonds and short-term investments). Four start dates are as shown: January 1, 2002, January 1, 2007, January 1, 2012, and January 1, 2017. All scenarios assume no contributions or withdrawals, with dividends and capital gains reinvested in the same Growth with Income Composite. When tax-smart investing techniques were applied, the resulting account values increased by $402,808, $224,933, $33,690, $30,154 respectively.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser, and Fidelity Personal Trust Company, FSB (FPTC), a federal savings bank. Nondeposit investment products and trust services offered through FPTC and its affiliates are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, are not obligations of any bank, and are subject to risk, including possible loss of principal. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FPTC, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917