I recently joined a professional organization to discuss various topics in wealth management. On our first Zoom call there was a debate around the use of levered long/short strategies. For the uninitiated, a levered long/short strategy is a way of taking market risk (like buying an index fund) while generating tax losses to offset capital gains (now or in the future). The leverage is what's important here. By borrowing against your holdings, you can short some securities while keeping the same overall market exposure as an index fund. So if the market goes up, you'd close your short positions (which lost money) to generate tax losses and hold your long positions (which made money). And if the market goes down, you do the opposite. Depending on how the market performs and how much leverage you use, you can generate cumulative net capital losses ranging from roughly 30% to 200% of the original capital invested over a decade. So if you invested $1M, these strategies could create anywhe