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Breta Grumbois, CRPC®
Vice President, Wealth Management
Fibre Financial Group
Retirement and Investment Services
Located at Fibre Federal Credit Union
822 Commerce Avenue, Longview, WA 98632
Phone: 360-414-4223
Email: bgrumbois@fibrecu.com
May/June 2023
Investing in the Midst of Volatility
The past couple of years have certainly emphasized the fact that investing has never been a sure thing. Stock prices fluctuated wildly and riskier investments like crypto reminded most of us of the definition of “extreme” risk. Global inflation, rising interest rates and geopolitical unrest further combined to roil markets and make investors nervous.
When stock prices and other investments decline in value and inflation soars, investors face a conundrum. Equities have historically been the hedge of choice when inflation is shrinking the value of your dollar, but recently the market downturn coincided with record inflation. According to S&P Dow Jones Indices LLC, the 2022 return for the Standard & Poor’s 500 Index was down almost 20%.*
What Now?
In this environment, it’s crucial to work with your financial professional to review your portfolio to identify any necessary changes to your investment strategy.If your investments are allocated with your time horizon and goals in mind, and if you have rebalanced your portfolio to account for falling equity prices, you may be able to wait for stocks to rebound. If it’s safety you’re after, look at fixed income investments — particularly of Treasury securities, whose yields have risen from near 0%.
IF YOU HAVE REBALANCED AFTER THE STOCK MARKET DECLINE, YOU MAY BE ABLE TO WAIT FOR A POTENTIAL MARKET REBOUND.
While you deal with current volatility, you may want to position yourself to take advantage of investments that do particularly well when equity markets rebound, or you may want to explore alternative investments.
Alternative investments, from real estate and private equity to precious metals and collectibles, can help you diversify your portfolio. Beware, however, of putting too much into any one type of investment, and think hard before putting a penny into something you don’t understand.
Take Solace
Meanwhile, if you do suffer capital gains losses, take solace in the fact the IRS will allow you to deduct some of them each year. A capital gain or loss is the difference between your basis, which is typically the historic cost of an asset or investment adjusted by certain previous deductions for depreciation and depletion, and what you get for selling it.If your investments have a realized net capital loss, you can deduct up to $3,000 of the loss against your income annually if filing jointly ($1,500 if married filing separately). If your losses exceed the annual limit, you may carry losses forward to future years, deducting up to $3,000 per year against your income until your capital losses are exhausted. Talk to your financial and tax professionals to learn more.
*Forbes.com, January 2023
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Fibre Federal Credit Union and Fibre Financial Group Retirement and Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Fibre Financial Group Retirement and Investment Services, and may also be employees of Fibre Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Fibre Federal Credit Union or Fibre Financial Group Retirement and Investment Services. Securities and insurance offered through LPL or its affiliates are:
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