Independent Investment Management and Financial Planning
Have you ever heard of the volatility tax? In case you haven’t, it’s the drag exerted on investment returns from volatility.
In other words, even if two different investments provide the same average annual returns, the investment with more volatility will deliver lower total returns. Let me illustrate. Continue reading “Beware the Volatility Tax”
The market officially entered correction territory on Thursday (10%+ decline).
On Friday, the S&P 500 bounced off the 200-day moving average (~$2,539) and then had a huge reversal to the positive to close at about $2,620. This could indicate a continuation of the rally over the next week or two producing positive returns. I’ll be closely monitoring other key levels during this rally such as the 100-day moving average (~$2,640), 50-day moving average ($2,719) and, of course, the prior peak of $2,872 from January 26th. See chart:
Continue reading “May be a good week or two for stocks. Watch for this, however…”
We’re almost nine years into this bull market. This means many of us own investments with significant unrealized gains, and we’d like to protect those profits.
One way to protect our profits is to sell the investment. Simple enough. But selling forces us to realize and pay taxes on all those gains. Besides, maybe we still like the stock for a variety of reasons and want to continue owning it. So selling may not be a great solution, but there is a strategy that can accomplish all our goals. Continue reading “A Strategy to Protect Gains, Defer Taxes, Participate In Market Upside and Collect Dividends”