While major portfolio reviews often take place after Thanksgiving, the middle of the year is also a good time to step back, take stock and do some portfolio fine-tuning. A few moves to consider:

Prepare for a capital gains tax increase. Since ETFs are tax-efficient and often held in taxable accounts, tax issues come to the forefront, particularly now that we've had more than a year of record gains for the stock market.

If your losses from previous years are not big enough to offset the outsized unrealized gains, consider selling ETFs that have appreciated substantially to take advantage of today's low long-term capital gains rates. While investors have until the end of the year to make the decision, midyear is also a good time to make some adjustments if a position has shot up quickly and looks due for a pullback.

In 2010, the long-term capital gains rate for stocks is 0% for taxpayers in the 15% bracket or below, and 15% for taxpayers above that bracket. Beginning in 2011, the Bush-era tax cuts will expire, and the rates will revert to those levels in effect before 2001. Unless Congress saves the tax cuts, which appears unlikely amid huge budget deficits, the tax rate on long-term capital gains will increase to 20%-a 33% hike over current levels.

With a $50,000 realized long-term gain, an investor could save $2,500 by selling this year instead of in 2011. It's OK to sell an ETF and buy the same one back if you want to record the gain now but maintain a position. Wash-sale rules keep investors from buying mostly identical securities within 30 days before or after a sale, but that applies to losses and not capital gains.

The decision to realize capital gains isn't clear cut, since the amount paid in taxes is no longer available to grow tax-deferred until the sale. But it can be a good move for people with shorter time horizons, such as those planning to sell appreciated securities within the next year or two to supplement retirement income or rebalance a portfolio.

Keep dividend-payers on a short leash. While dividends have historically been a big component of stock returns, the near-term outlook for them is cloudy. Last year, dividends paid on the S&P 500 index fell 21%, the biggest drop since 1938. S&P senior index analyst Howard Silverblatt doesn't see the dollar amount of dividend payments in the market rising to 2008 levels again until 2012.

Next year, dividend-paying stocks and ETFs face a new headwind in the form of higher taxes. For the last several years, qualified dividends, including dividend income generated by equity ETFs, were, like long-term capital gains, taxed at 0% for taxpayers in the 15% bracket and 15% for those above. With those low rates, it made sense to own high-dividend paying ETFs, even in taxable accounts. Unless Congress acts, dividends will be taxed at ordinary income rates as high as 39.6% starting in 2011.

While it's difficult to predict what the impact will be once tax rates increase, Westlake Village, Calif., financial advisor and CPA Mitch Freedman is already planning an exit strategy for high-dividend securities and ETFs held in taxable accounts. "Next year, the benefit of owning dividend-paying stocks in taxable accounts will be greatly diminished," he says. "Taxes are one of the biggest drains on investment returns, and once you remove a great tax break that's been in effect for several years, investors are going to take notice."

Test-drive some lesser-known indexes. The largest and most popular ETFs follow well-known, established indexes such as the Standard & Poor's 500 or Nasdaq. It might be surprising to investors that ETFs following newer or less-well-known indexes, however, have been beating their higher-profile cousins, and some managers see opportunity in them.

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