Hi Jan,
There's a question that comes up regularly from investors who've been told that direct indexing gives them the best of both worlds: index-like returns with built-in tax advantages. This week's article takes a closer look at what that actually means in practice.
The short version: direct indexing is a real and potentially valuable strategy, but it works as a tax-management tool, not a free lunch. The benefit comes from controlling when you recognize gains and how you use harvested losses within a larger plan, not simply from harvesting the losses themselves. Understanding that distinction changes how you evaluate whether it belongs in your retirement plan.
This week I'm walking through how direct indexing works, where the tradeoffs show up, and the circumstances where it tends to add the most value. If you've been wondering whether owning hundreds of individual stocks is actually better than owning one fund, this one's for you.
| | | | Why Own Hundreds of Stocks Instead of One Fund? Most investors are familiar with the logic behind index investing. Rather than trying to pick winning stocks, they buy a fund that owns hundreds of companies and allow diversification to do the work. The approach is simple, inexpensive, and has proven difficult to beat over long periods of time.
By Retirement Researcher | | | | Tax Efficiency in Retirement Is Built, Not Found Taxes are one of the highest costs in retirement, and unlike market returns or inflation, they respond directly to how decisions are made. That responsiveness is the opportunity. But taking advantage of it requires more than isolated tax moves made one year at a time. It requires structure.
By McLean Asset Management
| | | | Cash in Retirement: When to Hold It, When to Invest It
This live Q&A session covers real listener questions on direct indexing and tax-loss harvesting, how cash holdings fit into a retirement portfolio, dividend reinvestment in taxable vs. IRA accounts, HSA distribution rules after age 65, and more.
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