PJS Investment Management

A lot of what drives outcomes is below the surface.

For example, in 2022, when the S&P 500 fell more than 18 percent, two-thirds of mutual funds still made capital gains distributions, according to a 2025 Fidelity report.

That is not a headline most investors expect, and it is a reminder that taxable distributions from mutual funds do not always reflect market performance.

What’s really going on:
A mutual fund can distribute taxable capital gains when the manager sells underlying holdings at a profit, even if you don’t sell any shares of the fund.

It can happen in a down year; gains on individual holdings can occur while the overall fund value declines.

Buying a mutual fund late in the year can still leave you responsible for distributions tied to that full calendar year.

Fidelity cites a Morningstar study showing taxes may reduce portfolio returns by up to 2 percent annually on average when not accounted for.

There are ways to manage surprise distributions, including tax-smart account placement, tax-managed funds, and evaluating ETFs, where appropriate.

Remember, mutual funds and ETFs are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

This is not about avoiding mutual funds. It is about the benefits of working with a financial professional who can show you what mutual funds pay capital gains and what funds are designed to manage payouts. Your tax, legal and accounting professionals can show you how a capital gain will affect your tax situation.

Think “tax-loss harvesting” is only for bad markets or complicated portfolios?

At a simple level, it is this: using certain investment losses to manage taxes while keeping focus on your long-term strategy.

How it works in plain English:

➡️ Sell an investment at a loss, then replace it with a different investment that plays a similar role in the portfolio.

➡️ Use the realized loss to offset realized investment gains.

➡️ If losses exceed gains, up to $3k per year (for married filing jointly) may offset ordinary income on federal taxes, and the rest carries forward.

➡️ Losses can be saved to offset future gains.

➡️ Watch the wash sale rule, which is buying the same or substantially identical security within a 30-day period before or after the “tax-loss harvesting” sale (61 days total).

➡️ We can show you how tax-loss harvesting works. Your tax, legal, and accounting professionals can show you how your decision will affect your tax situation.

The goal is not to chase tax savings. It’s to keep more of the portfolio working over time while staying aligned with the strategy.

👨‍💼👩‍💼 Take Your Child to Work Day brings out the best kind of energy in an office.

Kids get to see where we grown-ups disappear all day, meet the people we talk about, and connect work to real life.

Those little moments stick—the walk around the office, the “what do you do” questions, the first time a kid feels included in something that matters to a parent.

Many of us have done this over the years, and it creates memories that last longer than anyone expects. It also gives kids a window into what good work looks like, showing up, being kind, solving problems, and taking care of people.

Hope a few future leaders are in the office today! 🏢

Would love to see photos in the comments!