Nithin Kamath’s advise for traders for higher portfolio returns in long term

Zerodha co-founder and CEO Nithin Kamath has an recommendation for traders. Taking to Twitter on Wednesday, Kamath suggested traders to think about tax-loss harvesting for higher portfolio returns in the long term.

“Successful investing is about doing boring things well. One of them is tax-loss harvesting. Booking a loss can be painful because we are all loss averse, & we instinctively try to avoid losses. But reducing taxes can add up in the long run & lead to better portfolio returns,” Kamath mentioned.

Kamath urged traders to test if they’ve realized short-term capital positive factors on which they should pay 15% tax. If sure, traders advised to additional test any holdings with unrealised short-term loss. If that’s the case, then traders had been advised to promote the holdings in lower than 12 months, ebook the loss and cut back the short-term captial positive factors and therefore taxes

“This is also a nice way to get rid of duds in your portfolio,” Kamath added.

In a separate twitter submit, Zerodha mentioned, if traders have realized capital positive factors on which they should pay taxes, they’ll cut back your tax outgo by promoting any holdings that are in losses earlier than March 31, which is often known as “Tax-Loss Harvesting.”

The inventory broking platform additional mentioned it has a report on Console that exhibits the losses that may be harvested.

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