Week 47 Day 3: Tax-Smart Rebalancing: Avoiding the Tax Drag

Selling winners to rebalance in a taxable account triggers capital gains taxes, which erode the very benefit you are trying to capture. Tax-smart rebalancing avoids this by using contributions, divide...

Selling winners to rebalance in a taxable account triggers capital gains taxes, which erode the very benefit you are trying to capture. Tax-smart rebalancing avoids this by using contributions, dividends, and tax-advantaged accounts to restore balance without triggering taxable events.