Quarter Four 2016 Commentary

Every election I get numerous calls from the supporters of both candidates asking, “What should I do if my candidate loses and that other candidate wins?” Interestingly enough I don’t get the reverse question, “What should I do if my candidate wins?” It seems fear is a far greater motivator than desire. My answer is always the same no matter who is asking and who is running, “Don’t make a change based on politics, only make a change if your needs have changed.”

The recent election was a valuable example of not making changes based on elections, politics or predictions. A Clinton win was “priced into the market,” meaning the market expected her to win and her winning was already adjusted for in the market. However, late election eve that prediction changed to a predicted Trump win, leading to the DOW futures being off -900 (predicting a -5% decline). But then the stock market, instead, went up two weeks in a row until last week when it turned in a mixed performance. So much for elections, politics and predictions.

As you likely know, I am a fan of the stock market, not greedy Wall Street, but the stock market of which millions of us partake. It is a great invention allowing those who commit their hard earned capital to share in the cumulative efforts of everyone who invests in, works for or buys from our companies. It is very simply a barometer of commerce. It is not a barometer of elections, politics or predictions. In the short-term, the market will go up and down but in the long-term it will continue to mirror the cumulative effort of us all.

Year-end Tax Tips

~ Defer income

~ Donate appreciated assets

~ Coordinate your itemized deductions

~ Fund retirement accounts

~ Realize deductible expenses

~ Watch out for the Alternative Minimum Tax (AMT)

~ Watch flexible spending accounts

~ Avoid the Kiddie Tax

~ Convert to Roth if it makes sense

~ Gift to family and friends (up to $14,000 to any individual without having to file a gift tax return)

~ Harvest losses (we do this for you automatically when appropriate)

~ Consult with your tax professional