Jodie Smith's LTM E-Newsletter - September/October 2024 - Investing Moves to Consider This Fall

Jodie M. Smith

Financial Advisor

Southeast Financial Wealth Management

5110 Maryland Way, Suite 100

Brentwood, TN 37027

Phone: 615-371-3737

Fax: 615-377-0090

TollFree: 800-521-9653, ext. 2321

Email: jodie.smith@southeastfinancial.org

September/October 2024

Investing Moves to Consider This Fall

Investing during autumn season as a group of trees shaped as a financial profit arrow changing leaf color as a finance symbol of aging investment losing momentum with 3D illustration elements.

Is your portfolio in line with your ability to tolerate risk? As we begin fall, there are some end-of-year investing moves that can help tune-up your holdings.

Harvest Losses

Generally, capital gains on investments you have owned for less than 12 months are taxed at your ordinary income tax rate, which may be as high as 37%. Loss harvesting concentrates on net profits. This strategy entails selling an investment at a loss to offset taxes on gains generated by more profitable investments.

Here’s a hypothetical example,* say you have $10,000 in gains on a short-term investment and $6,000 in losses in another investment you plan to sell anyway. If you sell the second investment, you only incur tax on the $4,000 gain on the profitable investment that’s not offset. What’s more, if your losses exceed your gains, you can deduct up to $3,000 in net losses from your total 2024 income.

Rebalance Your Portfolio

The bullish stock market in 2024 may have given your portfolio a heavier weighting in growth investments than your risk tolerance can bear. It’s time to look at rebalancing. Consider selling some of your overperforming securities and reinvesting the proceeds in fixed-income investments to potentially reduce your portfolio risk.**

Top Up Tax-efficient Accounts

For instance, if you expect a year-end bonus and haven’t already contributed the maximum amounts to your tax-advantaged retirement accounts, consider using some or all of your bonus to do that. The maximum contribution to a 401(k) plan in 2024 is $23,000, or $30,500 for those 50 and older. IRA limits are $7,000/$8,000.

72% OF NEW INVESTORS PLAN TO INVEST IN STOCKS. HOWEVER, MANY FIRST-TIME INVESTORS FALSELY ASSOCIATE THE STOCK MARKET WITH SHORT-TERM INVESTING.

Source: Bank Rate, 2023

Healthcare and college savings accounts may offer tax-advantaged options for year-end tax planning. If your business has a flexible spending account, you may be able to increase your contribution. Do you have a high-deductible medical plan? Fund a health savings account. The maximum contribution for an HSA in 2024 is $4,150 for an individual and $8,300 for a family. Touch base with your trusted tax and financial professionals about tax-advantaged college savings plans and other tax strategies before implementing them.

*Your situation and results may vary.
**Rebalancing a portfolio may create a taxable event if done outside of a retirement account, and asset allocation doesn’t guarantee a profit or protect against a loss, but it may help reduce volatility.

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Jodie Smith is a financial advisor with, and 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. Southeast Financial Credit Union and Southeast Financial Wealth Management are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Southeast Financial Wealth Management, and may also be employees of Southeast Financial Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Southeast Financial Credit Union or Southeast Financial Wealth Management. Securities and insurance offered through LPL or its affiliates are:

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