Transcript
Hello, everyone, welcome to Wednesday. I want to thank everybody who came to the lunch with Tom today. Really good group great questions had a really good time. And thank you very much, actually, unfortunately, the S&P 500 was down a little bit today was down .2%. And it was like watching an EKG machine, you know, readout just up and down, up and down, and really had a lot to do with the stimulus talks. Every time news came out one way or another, it was moving in that direction, I don’t have a lot of hope for the stimulus, especially to come out before the election, because it’s not that far away. But if it did, the market would respond positively to that.
I do want to talk about a question that’s been coming up with several of the clients. And that has to do with capital gains. So back in 2013, capital gains were considered ordinary income. And then they lowered the capital gains rate to very special calculation that used and so people pay less for capital gains. Well, the talk is that we have a Democrat in the White House and a Democratic Congress, that they might bring that back up to ordinary income in order to try to close this, you know, budget deficit that we have, if that did happen. And again, we don’t have to do anything right now. But we can wait and see what happens in the election. If that did happen, we might want to consider taking some gains, because once you take the gain, you pay the tax, you now have a higher cost basis on that money, you never have to pay the tax again, for the rest of your life. And we especially might want to look at the assets that we have that aren’t doing that great, you know, they’re okay.
But the only real reason we’re holding on to them is because we have this gain and we don’t want to pay the tax. Well, if they raise the tax, you might be really happy that you paid in 2020 instead of 2021 or beyond, very likely, if they do raise the tax, it would be retroactive to January 1, 2021. So it’s something we’d have to do here at the end of the year. Now, the other part of that is that everybody might be doing the same thing. And usually that means the stock market drops. And those type of scenarios are good buying opportunities, because they’re temporary. And so maybe we’re selling off some assets that we’re not that excited about. And we can buy something that we really think will do well for us long term. And then we’re raising our cost basis, and we have a better investment portfolio.
So it’s just something I think that we need to think about nothing to do now we can wait and see what happens to the election. But these are all pieces that are important to consider, and don’t have a huge amount of time, you know, November 3 to the end of the year, you know, isn’t a massive period of time, but enough time to get done what we need to do. So that’s what we’re looking at today. We’ll see what happens tomorrow, and I look forward to talking to you then. Thank you very much.