Selling losing positions in a taxable account to bank the capital loss for tax purposes, then buying a similar (not identical) asset. Can offset up to $3,000/year of ordinary income.
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Related terms
A cash payment a company makes to shareholders, usually quarterly. Gets taxed differently from ordinary income if "qualified" — long-term cap gains rates apply.
Investing a fixed amount on a regular schedule regardless of price. Smooths out volatility and removes emotion from timing decisions.
An all-in-one fund that automatically shifts from stocks to bonds as a target retirement year approaches. Great default inside 401(k)s; less ideal in taxable due to capital gains distributions.
A fund that trades on an exchange like a stock. ETFs often track an index, have low expense ratios, and can be bought and sold throughout the trading day.
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