TY - JOUR T1 - Practical Applications of Option-Enhanced Tax-Smart Portfolio Value JF - Practical Applications DO - 10.3905/pa.2022.pa518 SP - pa.2022.pa518 AU - Andrew Kalotay Y1 - 2022/10/19 UR - https://pm-research.com/content/early/2022/10/17/pa.2022.pa518.abstract N2 - Since the origination of the investment discipline, tax implications have always been secondary to investment decisions. Investment education resources and those for training investment professionals do not emphasize after-tax performance. Another idea favored by the investment community is that when investing, a more accurate measure of performance is not how much one makes but how much one keeps. These two ideas conflict since potential tax obligations from selling securities can significantly impact the actual value of investments.In Option-Enhanced Tax-Smart Portfolio Value, from the April 2022 issue of The Journal of Portfolio Management and other articles about the impact of taxes on investments, author Andrew Kalotay of Kalotay Advisors contends that there must be a change in how taxable securities are valued and how the performance of taxable investment portfolios is derived. “To discuss how you can improve after-tax performance intelligently, you must develop a way to measure it,” says Kalotay. This philosophical change in investment valuation would facilitate tax-loss harvesting decisions, enhance investment performance measurement, and provide a better way to compare the performance of fund managers and advisers. Kalotay believes that “there should be much more attention by academics and practitioners on the critical topic of after-tax performance.” ER -