Stock Prices Get a Booster In December
/Have a great month,
Brian E Betz, CFP®
Principal
New 401k Contribution Limits And Value Of Tax-Loss Harvesting
/Have a great month,
Brian E Betz, CFP®
Principal
Another Big Merger In The Works
/Hi everyone,
Click below to watch this week’s blog. Enjoy.
Have a great week,
Brian E Betz, CFP®
Principal
Thanksgiving Means Tax-Loss Harvesting
/Hi everyone,
It is hard to believe that there are only six weeks left in 2018. With year-end approaching, tax-loss harvesting is something to consider if you own a taxable investment account. Essentially, any non-IRA or 401k account you own. Taxable accounts are those for which you receive a Form 1099 each year.
What is tax-loss harvesting? It is intentionally selling positions at a loss, in order to use those losses to offset other gains you had during the year. It is a very useful strategy toward reducing your tax bill.
Here is how it works from a high level… Suppose back in April that you sold a bunch of company stock that had vested for a nice gain. For simplicity let’s say that is the only investment transaction you have made so far this year. You would be taxed on that capital gain.
Meanwhile, let’s suppose you own other stocks/funds as well. Some of these investments have fallen in value since you acquired them. You can sell some of these positions and apply the resulting loss against the gain from the company stock you sold. This helps reduce or eliminate your capital gains tax burden. If you have multiple taxable accounts, the cumulative gains and losses are netted against each other for taxation purposes.
The bottom line is that if you anticipate owing significant taxes related to investments you own, or if you are holding investments at a gain, let’s talk.
In The Market...
The S&P 500 fell -1.5% last week. Let's look under the hood:
(price data via stockcharts.com)
Most sectors were in the red coming off of the prior week’s gains. I actually felt last week’s -1.5% loss was more constructive than the prior week’s +2.1% gain because after taking a big tumble to start the week, stocks stabilized as the week wore on. I still anticipate that the market will continue to be choppy, much like we saw back in February/March when it took 2-3 months before prices started to rise.
No major portfolio moves last week. We added to our dividend-heavy S&P 500 index fund. For those accounts that own individual stock we logged a gain on United Health Care and a loss on Apple.
In Our Portfolios...
Have a great week - HAPPY THANKSGIVING!
Brian E Betz, CFP®
Principal