Tax-Loss Harvesting: How Often Should It Happen?

Tax-loss harvesting can be an important lever for improving after-tax returns, especially in direct-indexed equity portfolios.

While many strategies review positions monthly, a weekly cadence may capture more loss opportunities in volatile markets and allow smaller, more flexible trades. That can also help keep the portfolio closer to its benchmark, though it requires strong systems and careful wash-sale management.

The trade-off is clear: more frequent harvesting may improve tax efficiency and tracking, but overly aggressive trading can miss rebounds and weaken pre-tax performance. For advisors and investors, the best approach depends on market conditions, operational capability, and how much tax benefit is worth pursuing versus added complexity.