The Election Market
The Election Market is one of the hottest topics right now, with questions about the security of your own portfolio and ‘who will win?’ at the forefront of your mind. While the outcome of the election is hard to predict, the security of your portfolio is guided by a well-established strategy that we have been employing with you, our clients, for over a quarter of a century. Historically, the market is very volatile in the weeks leading up to and after the election, with 1-3% fluctuations up or down during this period. While these swings are outside of our control, sticking to the charted course and managing your allocation, asset location and most importantly cash flow in these times is key. The fixed income portion of portfolios -cash, bonds, treasuries- provide a sense of security during fluctuating markets. Equities, on the other hand, carry the market’s risk. If you are still working and saving, you may also benefit from an effective Dollar-Cost Averaging plan, as employer plans invest part of your paycheck into your retirement plan on a regular basis. This strategy is the most beneficial for your portfolio in the long term, the hardest part being to manage the dips, drops and valleys of the market along the way. We want our clients to understand that we are proactive in identifying rebalancing opportunities when they make sense for your portfolio. As always, we encourage our clients to stay informed and engaged in the electoral process.
Open Enrollment
Open Enrollment is here for most employed Americans or will be in the next week or two. We always recommend dedicating enough time during each enrollment period to review the new and updated offerings from your employer. Just because you have worked there for years does not mean there aren’t new benefits to consider! Staying informed on whether your current medical plan is still the best fit for your family, and understanding what to expect in coverage, copays and out-of-pocket costs is crucial to avoid unexpected medical expenses throughout the year. Additionally, being aware of auxiliary benefits such as parking, commuter programs, dry cleaning, pet care, therapy and other allowances might save you hundreds or even thousands of dollars, while also contributing to a positive lifestyle change. Legal Plans allow for year-round access to a variety of attorneys, ranging from auto accident consultation to cost-efficient estate planning. Please feel free to send us the Open Enrollment documents with any questions that you may have.
TCJA Sunset On The Horizon
The TCJA sunset date, even though more than a year away (12-31-25), is gaining traction in the media. With it, we expect sweeping changes to the tax code, and a reversion to the “old rules”. Some highlights include: individual tax rate increases; 50% reduction in the estate and gift tax exclusion amount; expiration of the QBI deduction; a 50% reduction in the maximum child tax credit per child (and a lower income phaseout range); reintroduction of the individual alternative minimum tax under the old rules (adding another dimension to your tax planning); decrease in the standard deduction and the return of personal exemptions. Itemized deductions will change, removing limits on state and local tax deductions, an increase in the mortgage interest limit, and the allowance of miscellaneous itemized deductions.
Lighthouse Financial Advisors is committed to educating our clients about the many facets of their financial lives. Please do not hesitate to reach out to us with any questions. Happy Halloween!
Sources:
https://www.thetaxadviser.com/issues/2024/sep/advising-clients-amid-elections-and-tcja-sunset0.html
https://www.fidelity.com/learning-center/trading-investing/election-market-impact
