NOVEMBER INSIGHTS
Ch-ch-ch-ch-changes. - David Bowie
“Changes” is the song that keeps playing in my head. It is said that the one thing we know for certain about life is that change is certain. With election results in, now we know that Republicans will have control of the executive branch and Congress come 2025 – change is upon us. As I’m sure you have been noting, the stock market has largely rallied since election results came in, and Bitcoin has been skyrocketing. In finance, many analysts are explaining that the market had bet on a Trump victory, but I don’t believe that is true – most analysts I read felt the race was too close to call, even if results demonstrate it wasn’t.
For the moment I think it is safe to say that the market is focused on potential growth that will come of tax cuts and other pro-business policies versus potential tariffs, the deficit, and inflation. While we wait to see what policy changes will be put in place, the case for repositioning is upon us. Lower taxes and less regulation favor certain sectors more than others. Beyond, energy and pharmaceutical companies might be in for a rough go if campaign promises are kept. Energy was the worst performing sector under Trump’s last Presidency, scrutiny is warranted.
On top of election news, the Fed cut rates another 25 basis points and is poised to cut again in December by the same amount. Trump has said that he is for Jerome Powell carrying out his term into 2026 which probably means steady is the base case for the Fed, again we will wait and see.
In the realm of tax, the Tax Cuts and Jobs Act (TCJA) was set to expire at the end of 2025 and now there is clarity that the “worst case” tax wise won’t happen.
Beyond the big news headlines, November is a great time to look at your tax picture – capturing gains and offsetting with tax losses. The Tuesday after Thanksgiving is notably Giving Tuesday, a time when we are reminded to consider our giving plans which of course are part of a complete financial plan. If you have any questions on tax optimization planning, please give me a call.
I wish you and yours a wonderful Thanksgiving full of joy, wonder, and gratitude. I am thankful for all of you – clients, investment partners, friends, and family. As I sit typing in beautiful Telluride knowing the mountain will open on Thanksgiving Day, I wonder what could possibly be better.
