One thing is certain when it comes to investing, taxes make a big difference in after-tax returns.

A recent article in The Wall Street Journal, “Individual Stocks vs. Index Funds: The Next Frontier,” discussed direct indexing as an advanced technique to potentially save on capital gains taxes. Instead of owning a single investment representing a sector or asset class, direct indexing means buying the hundreds or thousands of stocks individually that make up that asset class. While it’s a useful technique to aggressively harvest tax losses, the complexity involved is likely too much for most investors.

Carolyn Geer with the WSJ quotes Fran Kinniry, investment strategist for the Vanguard Group, as saying that “most investors would be better off simply holding tax-efficient investments, such as broad-market index funds and municipal-bond funds, in taxable accounts, and holding tax-inefficient investments, such as taxable bonds, in 401(k)s and individual retirement accounts.”

At Hill Investment Group, we agree. Here are our three main strategies to help increase after-tax returns:

• Optimizing asset location (as previously mentioned here)
• Tax-loss harvesting
• Using low turnover investments and tax-managed funds

According to Vanguard research, the first category alone can add up to 0.75% in annual returns, depending on the mix of investments.

Ending a relationship with a prior advisor can be difficult, but you can make the conversation much easier by preparing yourself with the appropriate things to say. Click here to see our template letter.

Last February we announced a new team member, and we’re back again in 2015 to do the same! We’re thrilled to have Katie Trout joining the Hill Investment Group team. We never claim to possess stock picking expertise, but we have been very lucky with picking great people.

Katie is an Executive Assistant at Hill Investment Group, and will support the firm by focusing on client services and all-around firm operations. You’ll hear her on the phone or meet her at the front desk the next time you visit, and in the months ahead you’ll have the opportunity to learn more about Katie through the team section of our site. We hold each new addition to our team to a higher standard than those before—always looking to better our firm, our service, and ourselves. We’re confident that you will reach the same conclusion that we have: Katie Trout raises the bar.

Katie formerly worked for Rick and Matt’s prior firm, Buckingham Asset Management. Prior to Buckingham, Katie was at Missouri Professionals Mutual in St. Louis. In her free time, she is involved with several local nonprofits, including Gateway to Hope, Kids Rock Cancer, and Crisis Nursery. Katie holds an MFA from the Sam Fox School of Design & Visual Arts at Washington University, and a bachelor’s degree from the School of the Art Institute of Chicago.

We thank you for your continued support. Please join us in welcoming Katie Trout to the Hill Investment Group team!