November 1, 2022

Jennifer Sheffler |

As we enter the last two months of the year, our thoughts turn to year-end tax planning. If you plan on gifting appreciated stock to taxpayers in zero to low tax brackets like charities, children or grandchildren, we ask that you contact us during November to allow sufficient time for your 2022 gifts.  Be sure to contact any of us by email or telephone and we will prepare the appropriate paperwork. Also, if you think income tax rates may increase in the future, another option you may want to consider is having your Required Minimum Distribution for 2023 go directly to a charity of your choice, thereby reducing your 2023 taxable income. As we get the final data for taxes in 2023, we will be sure to send that information to you on our annual Key Financial Data circular. 

November is the month that we look at “tax loss harvesting”, a tax planning technique that allows you to bank tax losses to use against current and future realized gains and to a certain extent, against ordinary income.  As always, if you anticipate any cash needs over the next 6 to 12 months, be sure to let us know so that we can prepare well in advance.  

We expect the U.S. Federal Reserve to continue its most aggressing tightening cycle in decades by initiating its fourth consecutive 75 basis point interest rate hike in November. The front-loading of policy rate tightening we have seen up to now has been aimed at getting to a positive real fed funds rate at the start of 2023. Instead of a pivot in this strategy, we anticipate the Federal Reserve will shift from front-loading up to December, towards more of a less aggressive pace of hikes in the future. What this means for stocks and bonds is more volatility until the Fed is satisfied that inflation is easing.

Year to date the Dow, S&P 500 and NASDAQ are negative at -9.92%, -18.76%, and -29.77% respectively, with the 10-year Treasury 4.10%.


*Disclaimer: This report is a publication of Marchand Faries Financial Management, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.  All expressions of opinion reflect the judgement of the author as of the date of publication and are subject to change.