Portfolio Optimization

Tax planning should be a consideration in all your trading decisions throughout the year. GainsKeeper provides portfolio optimization tools and strategies to help investors manage their portfolios in the most tax-efficient manner and become smarter about the impact of taxes on their real investment returns.

Need Portfolio Optimization Feature
Increase after-tax returns GainsKeeper offers strategies to help investors maximize after-tax returns and minimize taxes.
Generate pre-trade analysis GainsKeeper provides a tool that allows investors to know the implications of their buys and sells before they trade.
Monitor your investments With GainsKeeper's portfolio analytics tool, individual investors can get a quick snapshot of their long portfolio positions by asset allocation, industry diversification, market capitalization and top ten holdings.  In addition, the tool allows subscribers on a five months rolling basis to examine historical trends and patterns related to long-term investments.

Increase after-tax returns

GainsKeeper's trading strategies enable investors to identify trades that can improve their tax position.

  • Realize a short-term loss before it becomes long-term. Since the tax rate for short-term gains is significantly higher than that for long-term gains, it is often wise to realize losses on lots before they become long-term holdings, thereby lowering short-term gains. In contrast, waiting for a winning position to become a long-term holding allows investors to take advantage of the lower tax rate. The tax savings can be significant. GainsKeeper alerts investors to positions in their accounts that are approaching long-term status, displaying market value and current gain/loss against that value.

  • Avoid wash sales. If an investor is active in a particular stock, it is imperative to monitor the wash sales period before re-purchasing the stock. After a loss, investors need to be aware of the date the security can be repurchased and the earlier loss can still be recognized. Investors may find themselves unable to realize significant losses due to wash sales. If a security is re-purchased 30 days before or after it was sold for a loss, that loss is disallowable and added to the cost basis of the new tax lot. GainsKeeper identifies positions in your account that would trigger a wash sale if traded on the current day, helping investors avoid those trades.

  • Identify investments for the "Double Down" strategy. With the Double Down strategy, investors take positions that are currently in a deep losing state, and double their holdings in them. After waiting 31 days to be outside the wash sale window, those shares are then sold at a loss. This strategy allows investors to recognize losses for tax purposes without losing their stake in the position. GainsKeeper will alert users to positions in their accounts that are good candidates for the Double Down strategy.

  • Sell partial positions using Specific ID. Many investors fail to maximize the benefits of selling specific lots. If you hold multiple lots of the same security, selling only part of the position, without specifying which part, will result in FIFO accounting (First-In, First-Out). However, in most instances it is wiser to sell shares that have the highest unit cost, thereby minimizing gains and the tax burden. Even mutual funds can be sold using Specific ID rather than FIFO or Average Cost.

  • Use "Sell Grades" to sell optimal lots first. GainsKeeper's Sell Grade measures the tax consequences of selling your investments and ranks them accordingly. The higher the Sell Grade value, the more favorable the trade is from a tax standpoint. GainsKeeper assigns a Sell Grade to each holding and then ranks them from highest Sell Grade to lowest Sell Grade.

    A Sell Grade greater than 1.0 will save you tax dollars.
    A Sell Grade of 1.0 is neutral and has no tax impact.
    A Sell Grade less than 1.0 will cost you tax dollars.

    GainsKeeper's Sell Grade is derived from a proprietary algorithm that considers each tax lot's adjusted cost basis (i.e. the original cost basis adjusted for all wash sales and/or corporate actions), current holding period (i.e. long-term or short-term), current market price, and, most importantly, your personal tax rate and previous realized gains/losses, including the character of those gains and losses. In this way, GainsKeeper's Sell Grade is customized to each individual's portfolio and tax situation.

  • Recognize losses. The IRS allows investors to write-off a maximum of $3,000 in losses each year. With GainsKeeper's tax optimization tool, investors can enter their carryover losses to determine the impact of their gain/loss. GainsKeeper will then identify your maximum potential for savings from selling off losses and point you to the specific lots.

Generate pre-trade analysis

Are you thinking of selling a stock and want to know if the trade will create a wash sale? Do you want to know your tax liability if you sell a security? GainsKeeper's trading simulation tool enables investors to evaluate the tax impact of a trade based on information in their portfolios before they place the trade with their broker.

Monitor your investments

With GainsKeeper's portfolio analytics tool, individual investors can get a quick snapshot of their long portfolio positions by asset allocation, industry diversification, market capitalization and top ten holdings. In addition, the tool allows subscribers on a five months rolling basis to examine historical trends and patterns related to long-term investments.

Take Action

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