The Economics of Tax-Loss Harvesting

Market Minute

November 2023 – By Bob Veres

’Tis the season when many financial services professionals look at the best way to offset the taxable dividend distributions their clients might be receiving, using losses that can be ‘harvested’ by selling under-water investments and booking the losses on taxable (that is, not IRA or Roth) accounts.  This is not always a trivial exercise; a website called Capital Gains Valet reports that last year, 34 different mutual funds distributed more than 30% of their total value in the form of taxable distributions.

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Prepare for Landing

Market Memo

October 2023 – By Kyle Rohrwasser

Since July of 2022, we have had an inverted yield curve. This is when the 2-year treasury bond has a higher yield than the 10-year treasury bond. Typically, investors expect to receive a higher yield the longer the maturity of the bond. When the yield curve inverts it signals potential economic stress reflecting the uncertainty over the longer time horizon. Since 1978 the yield curve has inverted 6 times and each time a recession has followed. 2008 being the most recent and deepest.

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Bond Market Update

Market Minute

October 2023 – By Scott Rosenquist, CFA®

The yields on long-term Treasury bonds have climbed higher over the past few months and even more notably after the last Federal Reserve meeting where interest rates were held steady at 5.25-5.50%. The movement in the bond market highlights that while the Federal Reserve controls the policy rate, which yields on shorter maturity bonds track, longer maturities take more variables into consideration. Economic growth and inflation along with supply and demand are some of the factors priced into longer-term bond yields.

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