On Thursday, June 11, we were all reminded about how quickly market, investor and public sentiment can change, and even reverse entirely!
As Avantax Portfolio Management Group Director Martin Landry details in his June 11 market volatility commentary, a variety of sentiments drove a 6-percent drop in the U.S. large-cap-oriented S&P 500 Index, an 8-percent drop in the small-cap-oriented Russell 2000 Index, and a 13-percent drop in the yield for the benchmark 10-Year U.S. Treasury Note.
Broad and calm perspective is always best when immersed in this kind of market volatility, and part of that perspective is examining one’s overall portfolio for tax-loss harvesting opportunities.
We encourage you to think about your investments as a whole, and to that end, we can help identify where tax-loss harvesting can support an overall tax-smart investing approach to your portfolio.
Lastly, amid this latest spate of market volatility, here are six important thoughts for you:
- Breathe, and Try to Relax – Making rash decisions about portfolio changes during times of emotional stress often have negative future consequences and can potentially threaten long-term financial goals.
- Separate Fact from Opinion – With thousands of “expert” voices within earshot, it’s important to focus on the facts when reviewing market and economic stories in the media. The markets don’t go up or down for one or two reasons – try to look beyond the scary headlines to get a better pulse of the agendas of those delivering the message.
- Remember Your Long-term “Why” – Why are you investing for the long-term? Commonly, the reason is to set aside some current assets and income for future needs. Ask yourself, “Has that changed?”
- Discuss Your Fears and Concerns – During this time of high anxiety and uncertainty, investors should actively engage their Financial Professional to gather their valued perspectives. Your Financial Professional can assist in re-examining or reviewing your long-term financial goals, and the plan to pursue them.
- Know Your Needs – Investors should always know their needs for their money. If you need to use some of your investment assets in the short term for a major purchase or living expenses, it’s wise to re-assess where those monies are located and into what they’re invested.
- Stay Diversified* – When appropriate, a well-diversified portfolio of stocks and bonds can often alleviate concerns about being invested in the right place at the right time. Properly allocating your assets among various asset classes and diversifying your portfolio among several investment vehicles is meant to provide you with a strategy that can help reduce volatility.
We look forward to continuing to support your long-term financial goals, and are happy to discuss tax-loss harvesting to see whether those techniques are right for you.
Diversification/asset allocation does not assure or guarantee better performance/profit and cannot eliminate the risk of investment losses in declining markets