Is tax harvesting worth is for index funds/ETF?
Trying to decide if: 1) I should let Wealthfront manage my investments and pay them a fee (hoping to offset it with tax harvesting) 2) Invest directly in ETF in robinhood and let it ride 3) Invest in ETF and Index in Fidelity Which one is the most efficient?
Careful, these robo advisors will capture you first with low fees, once you get locked in with their funds, they will raise fees on all users eventually. Then your tax efficiency goes out the window as you will be afraid to unwind positions due to tax hit. Do a little research before committing.
Number 3 is your best option. Tax loss harvesting only has so much benefit if you don't plan on dying with all of your cash. The robo fees will eat the potential benefit pretty quickly after your portfolio grows. Also, tax loss harvesting can be done well enough manually on big market drops.
If you go with Schwab’s robot trader, there is no account fee. You just pay the ETF expenses, and you get tax loss harvesting too. Personally I think it’s a great way to offset cap gains from other investments while continuing to hold the same positions.
Wealthfront etc will say theirs is more efficient than DIY, which might be true on the margins but if you ever want to leave WF you will have a very unwieldy basket of stocks that will be harder to DIY Without any data backing it, I suspect you'll get 90% of the benefit by Diy harvesting and you won't be locked in
You could tax harvest yourself, concept is pretty simple. Also, if you want efficiency, which I'm assuming means lower fees, vanguard has some of the lowest fees for etf/index funds