Carry Forward (Investment Strategy)

Carry forward in investment strategy refers to the practice of offsetting current financial losses against future gains, reducing taxable income over multiple years. When investments suffer losses, investors can "carry forward" these losses to future periods, allowing them to lower taxes on any positive returns in subsequent years. This approach helps investors manage tax liabilities more effectively, especially during periods of market downturns, by retaining the ability to reduce taxes when investments recover and generate profits later.