Hypothetically if there was a brokerage that automated your investment deposits and also enabled you to tax loss harvest when prices dropped, would you be interested in using this service if it were free? It’s like a mix between M1 Finance and Wealthfront. While M1 does a good job of automating the investment portion, it doesn’t do well with capitalizing on the tax efficiencies from temporary losses. (E.g. I saved a lot on taxes last year due to manual tax loss harvesting). Wealthfront does take advantage of tax loss harvesting but doesn’t give you the freedom to choose your own portfolio & charges you unnecessary fees. Open to thoughts
No. I don’t think investors want to cut their losses without deciding to do so. A bot in the loop when you’re selling for a loss isn’t a great strategy. Maybe some notifications would be nice but absolutely would want a human in the loop for that for retail investors
Right, to clarify, the system wouldn’t necessarily do the tax loss harvesting automatically but it would just enable people to do it with 1 click if they chose do so. It’d recommend the alternative investment that’s similar to the one being sold & auto-sell + buy for you instantly to minimize time outside of the market. What do you think given this info?
How is that different from M1?
I like the idea
Not sure I understand how this works. If you let your customers choose their investments, how do you enable tax loss harvesting?
Good question - the tax loss harvesting would be mainly for etfs (though individual stocks could be post mvp), it’d recommend the other etf to buy after selling one at a loss to capture the losses without being out of the market for long. Once an investor decides to tax loss harvest, they’d just have to click 1 button to do so with full knowledge of what the other asset is that they’d buy. Does that make sense?
Makes sense - sounds useful