Just Another Tuesday

The market year-to-date (YTD) has been volatile, with relatively small net gains. That’s bad for most investors. But it's great for loss harvesting.

The year started calmly enough. At SAM, YTD loss harvesting rose slowly and steadily through January and February. In March, it began accelerating, and in April, it spiked. Crazily. To put this spike in perspective, in one day – Tuesday, April 8th – we did more tax loss harvesting than January, February and March combined. That’s a lot of loss harvesting ($2,184,829 in taxes saved or deferred. Not bad for one day’s work). The early April spike is easy to explain: the S&P 500 was down 11.5% over the first seven days in April – kind of a bonanza week for loss harvesting.

You can see all of this in the graph above. The blue line (right axis) is the tax saving/deferral from loss harvesting. The dashed red line (left axis) is the S&P 500. The solid red is turnover. The S&P 500 nose dives in April. Loss harvesting and turnover both spike.

So, what, you may ask, did Tuesday, April 8th, 2025, look like at SAM trading and rebalancing operations? Cancelled vacations? Yelling in the hallways? Heroic displays of focus and self-sacrifice? Gallons of extra coffee?

Nope. From a work perspective, it was just another Tuesday. SAM relies on the automated rebalancing technology of its parent company, Smartleaf. Every day, this technology automatically identifies loss harvesting opportunities as they occur and suggests specific loss harvesting trades down to the tax lot level, as well as specific security-level purchase recommendations. Some days it may identify few (or no) opportunities. Other days – like April 8, 2025 – it identifies a lot. But none of that changes SAM’s daily workflow.

Making portfolio management boring again¹

It’s not that we don’t appreciate heroics. We just think it’s better not to need them, no matter the complexity of your book. Loss harvesting? Tactical asset allocations? Model updates? Drift correction? Security preference updates? None of these – singly or together or even all at once – should ruffle any feathers or cause any change in daily routine. It should all be, well, boring. We know “boring” isn’t usually thought of as a high aspirational goal. But in the case of daily portfolio management workflow, we think it’s perfect. Because in this instance, “boring” doesn’t mean dull, time consuming and repetitive, it means so easy and in the background you don’t even think about it, freeing you to spend your time on stuff that matters – like, well, calming your clients in the midst of a highly volatile market. That’s a victory for you and your client. And it’s a victory for us, since we view our job as taking care of the boring stuff, quietly dealing with the complexity of reviewing, rebalancing and trading personalized and tax-optimized portfolios. So you don’t have to. Even on the biggest loss harvesting day of the year. 

Questions? Comments? Want to learn more? Drop us a line. You can email us at questions@smartleafam.com.

1. We’re not sure portfolio management was ever boring, so maybe this isn’t quite right. But you get the idea.