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Comment by yunong | Hacker News Reader

The one advantage with these robo advisors, or any broker for that matter, compared to a mutual fund is tax loss harvesting.

By having a separately managed account of ETFs or stocks, you can sell and exchange similar stocks when they lose value and harvest the tax losses to use at a later date.

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Tax loss harvesting only works in an account that generates capital losses AND is taxed on capital gains.

IE: IRAs and Roth accounts instantly don't give a care, because they're not taxed. Soooo, no benefit to tax-loss harvesting.

IE#2: Any security that actually makes money will be unable to be tax loss harvested. (You need a LOSS to benefit from the tax loophole)

Huh? If you're buying a diverse portfolio of equities then you're guaranteed to have some losers and some winners. You let the winners ride, sell the loses/bank the loss, and replace them with companies that have as similar risk profile to the one you sold as possible.

to reiterate what dragontamer is saying, if all of your investments are in IRAs (where there are no taxes, at all!), then TLH is meaningless.

only if you're maxing out your tax advantaged accounts, and still have additional funds to invest is TLH even relevant.

TLH is oversold a bit these days: https://www.bogleheads.org/forum/viewtopic.php?t=206806 It's unclear how much of a difference it really makes for most people.

I thought Hedgeable's perspective on not doing tax loss harvesting was interesting[1] I have been looking at these robo advisers since the start of the year.

https://www.hedgeable.com/blog/2015/09/how-to-protect-your-p...

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