Tools and Strategies
We evaluate your current holdings against global benchmarks such as the S&P 500 to identify concentration risk, then design a customized transition strategy using Aperio’s direct indexing technology. Unlike traditional mutual funds or ETFs, direct indexing allows us to hold individual stocks directly in your account, creating the ability to harvest tax losses systematically and even daily. As we gradually reduce concentrated positions, the technology continuously scans for stocks with temporary declines and captures those losses to offset capital gains generated from the sales—often lowering the tax impact by 30–40%. The outcome is meaningful diversification with greater tax efficiency, reframing part of what would have been a tax payment into a strategic cost of reducing risk rather than simply sending a check to the IRS.
Why This Approach Works Better
This approach is systematic, not sporadic—Aperio monitors portfolios daily throughout the year rather than relying on occasional, end-of-year tax moves, which allows for significantly greater tax savings over time. Because you directly own individual stocks instead of fund shares, we can tailor decisions to your specific tax situation; when a stock temporarily declines, we can harvest the loss and reinvest immediately in a similar security, keeping you fully invested while reducing tax exposure. Research suggests that this level of disciplined tax management can add an estimated 1.70% to 2.20% annually to after-tax returns over a decade compared to similar investments without active tax strategy—potentially preserving an additional $340,000 to $440,000 on a $2 million portfolio.
Continued Guidance
Every transition is tailored to your specific timeline and circumstances. Some concentrated positions can be diversified within six to twelve months, while others are best managed over two to three years to maximize tax-loss harvesting opportunities as the portfolio gradually shifts. We customize the strategy based on the size and number of concentrated holdings, your tax situation and projected income, liquidity needs and broader financial goals, ongoing harvesting opportunities, and whether you prefer to retain a portion of the original position. This matters because long-term evidence shows that investors holding a globally diversified portfolio over any 20-year period in modern market history have achieved positive returns. Rebalancing into global diversification isn’t about betting against what you own—it’s about constructing a resilient portfolio designed to withstand different market environments while reducing unnecessary risk along the way.
Our Services
Wealth Management
Grow your wealth with Rebalance’s low-fee, tax-efficient, globally diversified portfolios for both taxable and non-taxable assets. Our portfolios combine U.S. and international equities, real estate, and fixed income, all systematically rebalanced and tax-loss harvested to maximize after-tax returns.
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Financial Planning
Plan for all the chapters of your life, and know that we will be with you every step of the way.
True financial planning goes beyond numbers. At Rebalance, we take the time to deeply understand your goals, build a holistic, comprehensive strategy around them, and deliver ongoing guidance at every stage.
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Specialized Services
Rebalance clients receive comprehensive, long-term tactical guidance, supported by a strategy that adapts as life evolves. These services include Charitable Planning, Estate Planning, Reducing Concentrated Risk, and Tax Management.
More about Specialized Services Frequently Asked Questions
What is concentrated risk and why does it matter?
Concentrated risk occurs when a large portion of your wealth is invested in a single stock, company, or asset. While this often results from success such as equity compensation, a business sale, or long term appreciation, it can expose your financial future to unnecessary volatility. A thoughtful diversification strategy helps reduce risk while preserving long term financial objectives.
Can I diversify without triggering large taxes all at once?
Yes. Diversification can be approached gradually and strategically. We help design a plan that considers tax implications, timing, charitable strategies, and long term goals so concentrated positions can be reduced thoughtfully rather than all at once.
What strategies are used to manage concentrated positions?
Strategies may include phased selling, tax aware diversification, charitable gifting of appreciated securities, donor advised funds, and tax loss harvesting to help offset gains. Each approach is tailored to your financial situation, income needs, and long term plan.
How long does it take to reduce concentrated risk?
The timeline varies based on tax considerations, market conditions, and personal goals. For many clients, diversification is a multi year process designed to balance tax efficiency with risk reduction. We monitor progress and adjust the strategy over time to keep it aligned with your broader financial plan.
