Quick Take: Getting a Jump on Planning in an Election Year

Tips for investors looking to get ahead of potential post-election tax changes.

It may feel like there’s too much uncertainty to start making moves on your estate and wealth plans. But getting on top of potential changes now is essential for maximizing your savings and returns.

In an August 24 webcast, BNY Mellon Wealth Management Chief Investment Officer Leo Grohowski and a panel of experts explored possible election outcomes, reviewed potential tax law changes and offered strategies from both a portfolio and planning perspective.

“This is one of those periods where we really need to keep emotions in check.”

Here are three key takeaways:

1.

Act, but don’t overreact.

While the possible outcome of an election should factor into your planning, investment decisions should mostly be driven by market fundamentals that are aligned to long-term goals. “Some of the mistakes that we saw made in 2016 were more emotional reactions to a surprise outcome,” says Grohowski. “This is one of those periods where we really need to keep emotions in check.”

2.

Focus on ‘bottom-up’ opportunities.

Generally, there’s a lot of “top-down” focus among investors, i.e. - “What does the election mean for the economy, the markets?” But bottom-up opportunities tend to surface during times like these. “We take a lot of cues from the bottom up,” says Grohowski. “What are our analysts finding with companies? Where have there been overreactions that might benefit investors with a 12 to 18-month view?”

3.

Take advantage of the current environment.

Take time now to consider your options when it comes to tax-loss harvesting, tax-efficient charitable giving and gifting strategies. It’s important to take advantage of today’s low interest rate environment and consider using your available gift exemption. It’s also essential to prepare estate planning documents as soon as possible and consider reallocating or reducing concentrated positions.

For more, watch the full webcast here.

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  • The information provided is for illustrative/educational purposes only. All investment strategies referenced in this material come with investment risks, including loss of value and/or loss of anticipated income. Past performance does not guarantee future results. No investment strategy or risk management technique can guarantee returns in any market environment. This material is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. BNY Mellon Wealth Management may refer clients to certain of its affiliates offering expertise, products and services which may be of interest to the client. Use of an affiliate after such a referral remains the sole decision of the client. BNY Mellon Wealth Management conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. ©2020 The Bank of New York Mellon Corporation. All rights reserved.