Volume 6, No. 4, Autumn 2024

It’s an Election (and more)!        

There is a U.S. Presidential election this November, in case you aren’t looking. This year, the global and domestic scenes are dramatically different than during the last election. The world is currently a powder keg of wars, terrorism, and military actions. Meanwhile, the domestic view has seen major protests, unrest and political vitriol as the United States’ electorate is as divided as ever.  Somehow, through it all, the economy appears to be doing just fine, so far. How so?

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The stock market has shaken off the quick and severe interest rate increases that the federal reserve put into place back in 2022 and 2023(1). Rising roughly twenty-two percent year to date as of September 30(2), the S&P 500 index of large multi-national companies has defied expectations of the economic intelligentsia. A ‘soft landing’ has perhaps been achieved by the Federal reserve. Before getting too sanguine, however, the Fed started lowering rates by a half-point this month as there is some economic weakening showing in the data1.

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The burning question on many minds is what will happen to the markets when the country selects a new President this November. I am sorry to disappoint in that I don’t have a forecast for neither the winner of the election nor the market reaction under either candidates’ victories. It is likely that there will be pluses and minuses to both Trump’s and Harris’ economic proposals for different participants in the U.S. economy. While they tend to get the blame if and when things go wrong economically, Presidents are not wholly responsible for the economy’s performance. In my opinion, the economy under most Presidents is more likely a result of the prior government’s (Federal Reserve, President and Congress) policies more than the current policies. Consequential spending in new laws like the Inflation Reduction Act or tax cuts such as the Tax Cuts and JOBS Act generally take a few years to land in the ‘real’ economy and the President may be different by then.

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The takeaway is the same as it always is when we are approaching an exogenous event that has the potential to move markets. That is, Lionshead is here, no matter the market reaction. We remain committed to aligning  your assets with your long-term risk tolerance, resources, expenses, and expectations – full stop. If you have any concerns about your portfolios and would like to talk it over, please call us – we are here to help!

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It is now the fourth quarter, and we will be turning the calendar soon. You may be able to take advantage of annual, ‘use it or lose it’ opportunities before the end of the year. Gifting is one avenue to consider. We can assist you with the pros and cons as there can be potential tax implications. Generally, you can leverage annual exclusion gift limits ($18,000 per individual donor and recipient, $36,000 per couple) before year-end. These gifts can be given into a 529 plan for a future college student, a UTMA (custodial) account if the child is under eighteen, a trust, or outright to any person – they do not need to be a minor or in your family. 529 plan deposits may come with a state income tax deduction depending on your state and annual income.

Retirement plans and benefits - If you are self-employed, there is still time to consider a retirement plan for 2024. If you are employed by an organization that operates a 401(k), 403(b) or similar plan, you can still maximize your contributions and potentially lower your tax bill this year. If you are employed by a corporation with a range of fringe benefits, we can assist with your benefit elections for 2025 and help you consider options to improve or enhance them based on your financial situation.
 
Did you have any major life changes this year?  Were there any births, deaths, marriages, or divorces? If so, does your will and estate plan need an update?  Loose ends tend to be beneficiary designations on retirement accounts or life insurance policies, or outdated documents (living wills, powers of attorney, healthcare proxy). We recommend that you speak with us and your attorneys or accountants accordingly.

Tax loss harvesting – For accounts under Lionshead’s discretion, we will review your portfolios for opportunities to realize losses that exist in your taxable portfolios, if any. Should you have losses in other accounts that aren’t in our purview, you may want to consider taking those losses on your own. If you need decision support on an account, we are delighted to help review and make a recommendation.

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Review your insurance coverage – It’s never a fun topic but it’s essential to have the proper insurance policies around your life. If you haven’t looked at your coverage in a while, year-end is a good time to check.  A good place to start is life, disability, homeowners, auto and umbrella coverages. Contact your insurance expert if you have any questions, or don’t hesitate to email or call us.

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Charitable gifts – When it comes to charitable gifting, you will want to keep tax implications in mind to make the most of your gift. Most charitable gifts can be deducted from itemized tax returns. Gifting appreciated stock directly to the charity may have the added benefit of not triggering capital gains tax in the future. Qualified Charitable Distributions from IRA accounts are an option for some. ‘Donor advised funds’ may allow you to secure a deduction this year and decide when and what charity receives the money in the future.  

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We wish you a happy fall! Please contact our office with any and all questions, concerns or comments. We love to hear from you.

Regards,

Scott Lasky, CFP™

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[1] Source St. Louis Federal reserve economic data

[2] -Standard & Poors

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All statements are opinions and should not be construed as facts. This newsletter is for informational purposes only and should not be deemed as a solicitation to invest or increase investments in Lionshead Wealth Management’s products or affiliated products. The information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, your advisor makes no warranties with regard to such information, or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

All investment strategies have the potential for profit or loss; changes in investment strategies, contributions or withdrawals may materially alter the performance and results of a portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. 

Lionshead Wealth Management is registered as an investment adviser and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by securities regulators nor does it indicate that the adviser has attained a particular level of skill or ability.

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