6 Year-End Investing Missteps That Could Follow You Into 2027

The final months of the year can be a smart time to review your investments, take advantage of tax strategies and make sure your retirement accounts are on track. However, rushing to make moves before Dec. 31 can also create problems that don’t become apparent until 2027.

From accidentally triggering the wash-sale rule to chasing this year’s hottest investments, here are six year-end investing mistakes experts say could have lasting consequences.

1. Making Year-End Moves Without Looking at the Big Picture

It’s easy to look at year-end tax moves, such as tax-loss harvesting or Roth conversions, as eleventh hour tax saving strategies. The problem is that making these decisions in isolation could create unintended consequences.

Jenna Lofton, founder of Stock Hitter, said to consider how one year-end move can change the tax or investment implications of the next and “review them together before placing orders.”

Lofton also warned against making a tax-saving sale just for the sake of saving a little on your return. Doing so can leave you with an investment mix you wouldn’t otherwise choose.

“Deferring a gain can also mean carrying an oversized position into another year,” she said. “Compare the potential tax savings with the risk you’re keeping or taking on and decide whether the trade still makes sense.”

2. Accidentally Triggering the Wash-Sale Rule

Selling a losing investment to offset taxable gains can backfire if an investor buys the same or a substantially identical security within the wash-sale window of thirty days.

“Also, decide what you’ll own after selling,” Lofton said. A deduction doesn’t compensate for abandoning an investment you still want without a replacement plan.

She shared a hypothetical example where an investor sells 100 shares in a taxable account for a $2,000 loss in December, then repurchases 100 identical shares in their IRA within 30 days in January.

“That can disallow the December loss, and the IRA doesn’t receive the usual basis adjustment,” she explained. “You could discover at tax-filing time that the expected deduction is gone.”

3. Forgetting To Rebalance After a Big Year

A strong-performing investment can over-concentrate a portfolio more than intended heading into 2027.

Brianna Rodgers, director of investor education at Madison Trust Company, suggested remembering to rebalance your portfolio allocation throughout the year so it doesn’t become too heavily weighted toward one asset class, and not to wait until right before tax time.

4. Chasing 2026’s Winners Into 2027

Chasing the year’s investment winners in hopes of repeating their success can increase concentration instead of improving the portfolio, Lofton said. She recommended checking whether a new fund mostly adds companies you already own through other funds.

Similarly, Rodgers warned against making “emotional investment decisions based on short-term market performance.” The best strategy is to keep a diversified portfolio and contributions steady.

5. Waiting Until the Last Minute To Check Retirement Accounts

Investors who wait until late December to review 401(k)s, IRAs and other retirement accounts may leave themselves little time to fix contribution or distribution issues. Rodgers urged reviewing retirement contributions and distributions as early as possible.

One concern is that even a seemingly minor required minimum distribution (RMD) oversight can carry into the following year through a tax on the amount that was not distributed.

However, Lofton pointed out that not every retirement deadline is Dec. 31, so investors should make sure they’re paying attention to actual deadlines.

6. Ignoring How Assets Are Held

Investors may spend December optimizing investments and taxes while overlooking how assets such as businesses or real estate are legally titled, according to Blaire Solace, a financial advisor with Asset Protection, LLC. She urged investors not to forget including asset ownership and legal structure in an annual financial review. This is especially the case if new assets were acquired during the year. “[Otherwise,] by January, the tax forms look clean, but the structure is a mess,” she said.

Once a year, list what you own and how each asset is titled. “If everything sits in your own name, that is the gap to close before the new year, not after a claim,” according to Solace.

Don’t Wait Until It’s Too Late

Year-end investing shouldn’t be about making as many moves as possible before Dec. 31. A better goal is to make sure taxes, retirement accounts, asset allocation and long-term strategy are working together before carrying unresolved problems into 2027.

“Look at all your accounts together and ask whether the portfolio still matches the money you’ll need and when,” Lofton noted.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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