If you just sold all the Apple, you'd owe roughly $70,000 in taxes (federal 23.8% + Colorado 4.4% on $248,982 in long-term gains). Goldman's strategy diversifies you out while generating tax losses to offset some of that cost.

Why individual stocks instead of an index fund? Because you can't harvest losses from an index fund — it goes up or down as a unit. With 298 individual stocks, on any given day dozens are down even when the overall market is up. Those individual losers are what Goldman sells to generate tax losses.

The tradeoff: A 100% Apple position has a tracking error of 21.48% — your portfolio behaves nothing like the diversified market. Goldman's Low TE solution (0.53%) keeps you market-aligned while still harvesting tax losses. The multi-year options start with higher tracking error that gradually decreases as Apple shares are sold off over time.

The magic: The S&P 500 can be up 20% for the year, and Goldman is still harvesting losses on individual names that dipped temporarily. They sell Coca-Cola at a loss and buy PepsiCo. Sell one bank, buy another. The portfolio's overall exposure stays virtually identical, but you've booked a real tax loss.

The cost basis catch: Every harvest lowers your cost basis. If you sell the entire portfolio later, you'll owe taxes on the deferred gains. But if you bequeath the portfolio to heirs, they get a stepped-up basis at death — the deferred taxes disappear entirely. This is why tax loss harvesting is especially powerful for estate planning.

The core tradeoff: Faster diversification = more upfront taxes but less concentration risk and more harvesting potential. Slower = lower immediate tax bill but you're still riding Apple's volatility for years.