Securities trading well below cost have unrealized capital losses valuable to the investor. Tax Loss Harvesting is the act of voluntarily taking losses for the purpose of creating a current tax deduction to offset realized gains. The purpose is to minimize tax liabilities and keep the asset in the portfolio, where it can benefit the most from compounding. Poorly-performing securities not expected to recover in the near term are candidates for harvesting. Should the investor wish to stay in that asset class after the loss trades, they can purchase a substitute security with a high correlation to the original.