Can I avoid the wash-sale rule and still stay invested while harvesting a loss?

Yes – the key is to buy a similar but not "substantially identical" security so you keep market exposure without triggering the rule. For example, sell one provider's S&P 500 fund at a loss and immediately buy a different provider's total-stock-market or large-cap fund. They track slightly different indexes, so the IRS doesn't treat them as identical, and you avoid the 30-day wait. After 31 days you can switch back if you prefer the original. The other clean option is simply to sell, hold cash or a bond fund for 31 days, then rebuy – but that risks missing a rally. Be careful not to repurchase the same fund in any account, including your spouse's accounts and your IRA. Done right, harvesting lets you bank a tax loss while staying essentially fully invested.