Another good explanation:
<a href="http:&#x2F;&#x2F;www.cnbc.com&#x2F;2014&#x2F;11&#x2F;26&#x2F;beware-of-the-year-end-mutual-fund-tax-blowup.html" rel="nofollow">http:&#x2F;&#x2F;www.cnbc.com&#x2F;2014&#x2F;11&#x2F;26&#x2F;beware-of-the-year-end-mutual...</a><p>If these securities have been held for &lt;1 year, their gain&#x2F;loss goes into the short term bucket. So losses (in this case, writedowns) can offset the size of distribution, which is a bad deal for investors.<p>To a personal investor (e.g. mentioned in the world of WealthFront&#x2F;Betterment), this is &#x27;tax loss harvesting&#x27;.