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“That is as good as money sir, those are IOUs.” – Lloyd Christmas

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Hello again from Kansas City where, like everywhere else in the U.S., it is tax season. And, if you’re like me, you’re scrambling to get that return done by this year’s deadline of Monday, April 18th.

I’m always particularly nervous when mid-April rolls around as I never seem to quite get things right. I either owe far too much or get back too big of a chunk, which leaves me knowing I left money on the table that I could’ve otherwise invested.

Of course, taking our eyes off the financial ball is something that each of us knows something about. Take gift cards, for example. A recent survey by the folks at Bankrate estimates that Americans own more than $15 billion in unused gift cards. I think about half of that might be in my glove compartment.

In fact, unused gift cards are so common that they’ve even spawned a cottage industry. Would you believe there are now actually websites where you can sell your unused gift cards at 70-80% of their value?

As with these unused treasures, it’s true that investors cumulatively miss out on billions of dollars each year due to ineffective tax planning and other financial missteps. To avoid such financial pain, advisors say individuals should carefully consider how taxes impact their portfolio’s total returns e.g. using a tool such as tax-loss selling in our year-end planning.

In addition, we also should think about how to react – and act – if an investment no longer fits our strategy, regardless of whether the investment has made money or not. Yet, when it comes to losing money, are we willing to let go if something that’s in negative territory? Or does our pride kick in, leading us to hold on to something in the hopes that it breaks even or returns to the black?

Truth is that the disciplined investor, backed by a good financial advisor, is often willing to take the loss to allow their portfolio to get back on track quicker, realizing that the losses could aid their tax situation by offsetting capital gains income.

At Realto, we believe that a steady financial advisor is – literally and figuratively – as good as gold and, as a platform for the sale of alternative investments, we work with advisors to help investors buy and sell securities that may otherwise be difficult to acquire or move. After all, if an efficient marketplace for unused gift cards exists, shouldn’t there be a similar venue for alternative investments?

So, as you finish those taxes and click “submit” in that e-filing, don’t worry about what might have been but, instead, look ahead and what that portfolio of yours may become. And you might want to check your glove compartment in your car, or that junk drawer at home and see how many little treasures you can find.

Take care,

Jeff

*Please note that the opinions in this column should NOT and do NOT take the place of tax or investment advice from licensed professionals, like accountants and financial advisors. And, if you’re thinking about selling those unused gift cards, do some research and check with good resources such as the Better Business Bureau’s website before making any decisions.

 

 

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