Dear fellow practitioners, CPAs, attorneys, and other professionals. Welcome to the eleventh edition of our “Dreidel” newsletter about planning and investment issues of US citizens living overseas.

This month Mike Reed talks about portfolio moves you may want to make in the wake of the market run up.

Over the last few years there has been a good run in stocks, especially in large US companies in technology and AI.  As a result, investors are sitting on large unrealized gains and a portfolio that may no longer fit their risk tolerance or goals. Equities may now be overweight.  While this is not a market call or suggestion to sell, now might be the right time to do some tax planning, rebalance portfolios, and enact risk management.

Portfolio Moves to Consider

• If someone does have some large unrealized gains that they do not wish to recognize, it may be a good idea to  take a look and see if they are sitting on any loss carryforwards from previous years.  Now may be a good time to use them to offset gains from this year.
• Secondly, investors may have unrealized losses in their portfolio.  This could be an opportunity to recognize them and offset gains. This allows investors to rebalance the portfolio and align it with their goals and risk tolerance.
• Business owners who took a capital loss this year could possibly use it as an offset to realized gains in their stock portfolio.
• For those who are charitably inclined, donating highly appreciated shares instead of cash could be a good idea.  Most charities have an investment account, and shares can be transferred from the investor’s custodian to the charity’s custodian.  The benefit is that an investor can still help their favorite charity while at the same time saving on capital gains taxes and rebalancing their portfolio. However, all of this must be done in a way that is in compliance with US tax code.

Summing it up

This piece is not meant to be a market call, but a reminder that it might be a good time to check up on portfolios to make sure they match risk and goals.  If taxes are keeping someone from taking action, there may be some ways to lower the tax bill when the market runs up. As a reminder, nothing in this article may be construed as a recommendation specific to any one individual. For investment or tax advice that applies to your individual situation, contact a financial advisor and/or a CPA.

We are happy to discuss this in further detail. Please contact us to discuss.

Disclaimer Nardis Advisors LLC (“Nardis”) is a Registered Investment Advisory Firm regulated by the U.S Securities and Exchange Commission in accordance and compliance with applicable securities laws and regulations. Registration does not imply a certain level of skill or training. Nardis does not render or offer to render personalized investment advice through this medium. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and Nardis.