Dec. 13, 2022

Che! Tales from Argentina and Tips on Year-End Tax Planning


Show Notes

In this week’s episode, Greg recounts his recent trip to Buenos Aires, from the food, geography, and people to their current financial situation. He speaks on the local impact of their economic struggles as well as investment opportunities and their incredible opportunity to make changes.

The guys also delve into year-end tax planning which is especially important this year due to the performance of mutual funds. They give tips on looking at your fund families’ capital gains distributions and whether you should do some tax-loss harvesting before now and the end of the year.


Key Takeaways

  • [04:25] - Can you eat steak for each meal, every day?
  • [05:18] - The conversion of Argentina into a nationalist/socialist country
  • [06:47] - How 100% annual inflation affects the local people
  • [7:44] - The current state of the Argentinian economy
  • [13:09] - Investment opportunities in Argentina
  • [15:36] - The inefficiency of actively-managed mutual funds
  • [16:32] - Taxable capital gains
  • [17:23] - Performance of 2022 Mutual Funds
  • [17:44] - Morningstar’s list of fund families’ distribution estimates
  • [18:42] - How to avoid capital gains tax
  • [20:24] - An example of taxes on a fund that’s down this year
  • [21:29] - Direct Indexing
  • [21:47] - Tax loss harvesting


Quotes

[13:57] - “The food in Argentina was so good. The drinks were great, the ambiance was great. But the governmental policies have really taken the country in a really bad direction. If things improve, then they really have everything they need from a pure natural resource standpoint to become a, you know, a very wealthy country like, like they once were.” - Greg Stokes

[18:13] - “It's just insane how some of these funds, even though they're flat or down or down big this year, are gonna have a negative tax impact to the client of, or the shareholder of that fund, even if that shareholder remains an investor. So the way that you get around this is by selling the fund before the capital gain is distributed, assuming that you don't have a gain in the fund itself.” - Doug Stokes

[21:09] - “If you can do tax loss harvesting to mitigate the capital gain impact from the rest of the portfolio, or if you're selling a business that's gonna have a capital gain and you could do tax loss harvesting to mitigate that impact from a capital gain perspective, that's a fantastic way to manage a portfolio for after-tax returns. Another fantastic way to do it is to not hold these funds that are gonna distribute capital gains at the end of the year, even though you might be down in the position. It just doesn’t make any sense.” - Doug Stokes


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Disclosure

The information in this podcast is educational and general in nature and does not take into consideration the listener's personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.