Great news! You just experienced a liquidity event but soon comes the not so fun part: paying taxes on it.

A liquidity event could be the sale of a business, the exercise of stock options, an inheritance, or selling a highly appreciated investment. Suddenly you have a significant amount of cash that needs to be invested, but it requires a plan.

A Separately Managed Account (SMA)* provides holistic tax management based on your tax sensitivity with an aim to improve after-tax performance. The SMA approach provides you with greater control, transparency, and tax flexibility when investing significant capital.

The featured benefit of an SMA is giving you the opportunity to turn temporary market declines into losses that can offset gains and improve your after-tax wealth. Think of it like this: Instead of simply owning a fund, you directly own the underlying investments, which allows us to harvest losses when opportunities arise. Those losses can potentially offset gains elsewhere and improve your after-tax outcome — all while keeping your portfolio aligned with your long-term strategy.

Check out the video below for a brief overview of how you can benefit using an SMA investment strategy.

If you’re anticipating a liquidity event or recently experienced one, it’s worth discussing how an SMA can benefit you. Please contact us here.

*SMA investing through Pensinger Financial requires at least $250,000 of liquid cash