Many “experts” are urging investors to re-position their portfolios for tax changes that may happen in 2013. These changes are part of the “fiscal cliff” — the mix of tax hikes and spending cuts that will take effect Jan 1 unless politicians compromise on a different set of laws. I would urge you to tune out this noise, and focus instead on tried-and-true ways to minimize the tax bite on your investments.

There are four reliable strategies to minimize tax on your investments:

1. Max out contributions to your 401(k), 403(b), IRA and other tax-preferred accounts. You will defer tax up-front on most of these plans and delay paying tax on any gains for years or decades.
2. Minimize trading, which minimizes taxable gains. If you buy mutual funds, select funds that have low annual turnover (20% or less), so the fund manager is not constantly generating taxable gains and sticking you with the tax bill when you didn’t even sell your shares in the fund.
3. “Locate” your investments strategically. If your money is split between a retirement plan like a 401(k) and a taxable brokerage account, put the investments likely to generate more tax (like bonds or commodities) in your tax-deferred account, and investments likely to generate less tax (like long-term stock holdings) in your taxable account.
4. Harvest your losses. If you sell and generate losses in a year, try to balance it out with gains. That doesn’t mean to sell something you don’t want to sell, but it does mean you can sell it without taking as big a tax hit.

The only reason you should re-jigger your investments to anticipate potential tax law changes is if you were going to do it anyway, and you’re taking a “bet” that it’s better to do it in Dec 2012 instead of Jan 2013.

Otherwise, follow the “boring” strategies that have helped smart investors manage their tax bill for decades … and leave prognosticating to the media.