CFA Lisa Goldberg

3 key takeaways: Investment speed in municipal bond portfolios does not equate to better outcomes. A higher yielding portfolio does not always mean better performance for a client. Using municipal bonds for tax-loss harvesting may help lower taxes, not just defer them. People often hear claims such as ‘humans only use 10% of our brains’, we swallow spiders in our sleep’, or ‘that the liver can regenerate itself’, but most of these popular myths do not hold up to research.

The Bottom Line: Offsetting capital gains from a near-term liquidity event may require abundant capital losses, which in some cases can be supplied by a long/short tax-managed portfolio. Once the investor's near-term goal has been achieved, it may be prudent and cost effective to delever the long/short portfolio. Like charting a rocket’s re-entry, engineering a deleverage plan for a portfolio is analytical, nuanced and consequential.