Wealth Planning Perspectives

In times of heightened volatility, a question we are frequently asked is, “Should I sell out of the market?” While the temptation to react in the face of uncertainty is strong, the evidence over many decades clearly shows that investors cannot consistently time the market.

There has recently been a steady drumbeat of warnings and reports from politicians and the media alike over the U.S. debt ceiling. Despite reaching the debt limit back in January, Congress has failed to raise the ceiling for government borrowing. The U.S. Treasury Department has been using “extraordinary measures” to service the debt since then but as those measures run out of funding, Congress must act to raise the limit. In this piece we will explain what the debt ceiling is, why the ceiling hasn’t been raised, the consequences should our government fail to raise the ceiling, and the most likely path forward.

Given the sizable drawdowns witnessed in capital markets over the first half of this year, it seems topical to discuss the concept of tax-loss harvesting. In essence, tax-loss harvesting is selling an investment asset that is currently worth less than its original purchase price (also known as the stock’s cost basis) in order to offset the amount of capital gains tax due on the sale of other securities at a profit. Just as investors pay taxes on capital gains they receive when they sell an investment, they can also use the losses from an investment to their benefit.

The July 2022 CPI report came in flat month-over-month, sending the year-over-year inflation rate down from 9.1% in June to 8.5% in July. While the easing in the year-over-year rate is a welcome sign, the absolute level of inflation remains far too high. This means the Federal Reserve will continue to tighten monetary policy to bring inflation down close to their target rate.

Over the course of a year, individuals typically ask about Donor-Advised Funds (“DAFs” or “Fund”) on several occasions: tax time, at the end of the year, or during a year in which they had a transaction. There are immediate tax benefits from establishing a DAF, and oftentimes individuals want to lower their tax burdens…