The insight behind this post is based on the Animal Spirits podcast episode dated November 20, 2020 about direct indexing (Animal Spirits: Direct Indexing — The Irrelevant Investor)

Concept:

Direct indexing is an investment strategy where an investor seeks to replicate the risk/return profile of an index by buying individual securities rather than an indexed ETF or mutual fund. The value proposition is multifold: primarily, investors can frequently realize capital losses, which they would net against realized capital gains, thereby effectively ‘maximizing’ their cost basis in the securities they own. This concept, known as “tax-alpha,” can purportedly boost after-tax portfolio…




Matthew Beyerle

Accountant, retail investor, runner, and optimist

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