Discussing Year-End Planning and What You Should Expect For Your Mutual Funds
December 6, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Jake Sanders, and I am a partner at Wealth E&P and operate as a Wealth Advisor and Certified Financial Planner.
Now, if you’re like a lot of people at this point in the year, you may be doing some year-end planning. Among some items you’re going to check off are tax projections for the year. You may be thinking that with the market being in the shape it's in right now, which is down for the most part across the board, at least you don’t have to worry about paying any taxes on your portfolio.
However, if you have a non-qualified mutual fund account, or are at least heavy in mutual funds, you’ll find out that it is not the case. Mutual funds can harvest gains and losses on schedules that have nothing to do with what the broader market is doing; you may find at the end of the year that you have a 1099 with a gain. Here is an example: Fidelity Leveraged Company Stock’s large-cap blended fund is down over 17% thus far for the year. However, it’s also going to pass on the equivalent of about a 13% gain for the year on top of the dividend it is going to pass on as well.
The point is this: you’re really not in control. Unless you go do an analysis, you’re really not going to know what it is until you get that 1099. If you’d like some help with that analysis, want to find out more, or want to know how we handle that at Wealth E&P, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute! We appreciate you and hope you have a great rest of the week!
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