Abstract: A method for creating and managing a portfolio of securities with a tax-enhanced index strategy is provided. When the securities are stocks, the method includes: a) electronically accessing at least one database of stock information; b) electronically selecting individual stocks for an investment portfolio based on information in the at least one database meeting certain criteria to obtain an index of stocks; c) buying the selected stocks in an investment account; d) holding the bought stocks in the account for a period of time without any additions or deletions of stock to the investment account except in extreme circumstances; e) determining which of the held stocks has decreased in value and which of the held stocks have increased in value a predetermined amount; f) selling the stocks which have decreased in value to realize losses for tax purposes; and g) repeating steps a) and b) to reformulate the index.