An Hour Ago
Take a few steps to save on taxes stemming from your investments
Big returns in 2024 will likely lead to hefty taxes when you file next spring, but investors can take a few steps now to minimize the hit.
Do a check-up on your investment portfolio to see how you can enhance its tax efficiency. According to Jared Woodard, an investment and ETF strategist at Bank of America, one option is to switch some of your existing mutual funds for exchange-traded funds. Mutual funds can spin out hefty year-end capital gains distributions as managers sell holdings to cash out departing investors.
Another strategy is to rethink your asset allocation and location. Assets such as Treasuries, money market funds, and other fixed income investments spin out interest that’s taxable as ordinary income on the federal level. It may be advisable to hold them in a tax-deferred account to minimize the tax impact.
Investors are also urged to consider other tax-efficiency tips to maximize their returns. Saving on taxes can significantly enhance the overall profitability of an investment strategy, so it is essential to take advantage of all available opportunities to minimize the tax burden.
House’s proposed bill to divest or ban TikTok might have broader stock market ramifications, strategist says
The House of Representatives recently passed a bill that might force Chinese company ByteDance to sell TikTok within six months, or else it would be banned from U.S. app stores. This bill, if passed by the Senate, might have significant repercussions for the broader technology sector, according to Jay Woods, the chief global strategist of Freedom Capital Markets.
Woods believes that if ByteDance is required to divest and sell TikTok, it is likely that one of the mega-cap names such as Alphabet, Meta, or Microsoft would be interested in acquiring it. Smaller deals have faced numerous regulatory hurdles in the past, as seen with the blocked merger between JetBlue and Spirit Airlines.
Apart from the potential impact on the technology sector, the bill might also affect stocks with Chinese exposure. Apple and Tesla, two prominent tech companies with a market presence in China, have already experienced declines in recent weeks due to weakening sales in the Chinese market. The bill’s passage might potentially trigger further retaliation from China, which might have additional implications for companies with a significant presence in China.
Stocks making the biggest moves in extended trading hours: Robinhood, SentinelOne, and more
Several stocks experienced significant movements in extended trading:
– Robinhood stock gained 8% following reporting its selected monthly operating data for February 2024.
– SentinelOne, a cybersecurity stock, saw a 10% decline despite posting fourth-quarter earnings and revenue above LSEG’s estimates.
– Under Armour stock added less than 1% following the sportswear company announced that CEO Stephanie Linnartz would be stepping down.
These movements in the stock market highlight the volatility and opportunities present in following-hours trading. Investors who closely monitor and react to these price fluctuations may have the chance to capitalize on short-term gains.
Potential Future Trends and Recommendations
Based on the aforementioned themes and developments, several potential future trends can be identified in the investment landscape. It is crucial for investors to stay informed and adapt their strategies accordingly. Here are some predictions and recommendations:
1. Increased Focus on Tax Efficiency: With the potential for significant tax burdens on investment returns in the coming years, investors should prioritize tax efficiency. This includes exploring strategies such as asset location optimization, tax-efficient investment vehicles like exchange-traded funds, and maximizing retirement account contributions.
2. Heightened Scrutiny of Chinese Companies: The proposed bill to divest or ban TikTok reflects a broader trend of increasing scrutiny and regulation of Chinese companies operating in the United States. Investors should monitor developments in this area and assess the potential implications for their portfolios, especially in sectors with significant exposure to China.
3. Volatility in Extended Trading: After-hours trading has become increasingly popular, with notable stock movements occurring during this period. Investors should consider the potential opportunities and risks associated with extended trading hours and employ appropriate risk management strategies.
4. Technology Sector Dynamics: The outcome of the TikTok bill might impact the technology sector, particularly companies with Chinese exposure. Investors should closely follow any developments regarding regulatory actions and geopolitical tensions that may affect the sector’s performance.
5. Leadership Changes in High-Profile Companies: Changes in leadership, such as the announced CEO transition at Under Armour, can impact stock performance and overall company strategy. Investors should evaluate the potential implications of such changes and assess their impact on long-term investment decisions.
In conclusion, the investment landscape continues to evolve and present both challenges and opportunities for investors. By remaining proactive, staying informed regarding emerging trends, and considering the potential implications of important events, investors can make better-informed decisions and position themselves for long-term success.
