4 Year End Portfolio Moves

October is month when leaves are changing color, there’s a nip in the air signaling the beginning of fall, and of course stock market corrections!

I can’t believe as I write this that we have already entered the fourth quarter. Boy time flies! I’m completing my year end client reviews and advising clients on their portfolios. With year end comes portfolio adjustments too.

With volatility increasing dramatically, and a market correction looming, what year end portfolio moves make sense now?

Here are 4 Year End Portfolio Moves:

Stick with stocks. Yes, I said keep your stocks. Even though there has been increased volatility you still need them for long-term wealth accumulation. I’ve heard everyone I talk to, from clients to the kid at McDonalds, predicting a stock market correction. In fact, we may have one any day now. But what that tells me is that it’s probably a good time to invest!

All joking aside, stick with your stocks. This market has enjoyed low inflation, good corporate earnings and no signs of a recession on the horizon. Some experts estimate there is over $10 trillion in cash on the sidelines that could come into this market! It’s amazing that so many people underestimated this terrific Bull Market over it’s run. Make sure you are choosing quality and not speculating. That’s where you can get burned. You could simply turn it over to a financial advisor or portfolio manager.

Choose your bonds wisely. With interest rates at all time lows and bond prices at all time highs, you’ll want to be a choosy shopper when it comes to bonds. All of these strategies will help your bond portfolio when interest rates start to go up. I covered what happens to your bond prices when interest rates rise in a previous article.

Sell your losers. As of the date of this article, it’s October and the Dow Jones is flat. It’s made zilch for the year. So that  means you probably have a few losers in your portfolio too. Fourth quarter is a terrific time to sell those losers to offset any gains you have elsewhere. A term called tax-loss harvesting. You can get the tax benefit for the year, then turn around and repurchase at the beginning to the first quarter. If the stock remains a good investment. (Please consult with a financial professional prior to making decisions regarding your use of this strategy. Wash sale rules would prohibit an investor from claiming a loss on the sale of a security if the investor buys a substantially identical security within 30 days before or after that sale.)

Naturally, this is not an exhaustive list of moves you can make in your portfolio. There are countless investments and strategies available, this will serve as a starting point. Check with your advisor before making any changes.

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