Sept. 29, 2025
Concentrated Stock & Capital Gains: Strategies to Manage Risk and Taxes
In this episode of Something More with Chris Boyd, Jeff Perry, and Russ Ball join Chris
to tackle the challenges of concentrated stock positions and embedded capital gains.
Whether it is legacy shares, inherited assets, or long-held business equity, these situations
can create significant tax and portfolio risk. The team explores smart strategies to manage
exposure, reduce volatility, and navigate tax implications without necessarily selling.
This episode is a must-listen for investors facing concentrated positions or advisors
helping clients preserve wealth while minimizing tax burdens.
For more information or to reach TEAM AMR, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
#CapitalGains #ConcentratedStock #TaxPlanning #InvestmentStrategy #PortfolioRisk
#WealthManagement #FinancialPlanning #EstateStrategy #OptionsHedging
#AssetAllocation
1
00:00:00,780 --> 00:00:03,300
Welcome to Something More with Chris Boyd.
2
00:00:03,680 --> 00:00:06,620
Chris Boyd is a Certified Financial Planner Practitioner
3
00:00:06,620 --> 00:00:09,240
and Senior Vice President and Financial Advisor at
4
00:00:09,240 --> 00:00:11,540
Wealth Enhancement Group, one of the nation's largest
5
00:00:11,540 --> 00:00:13,140
registered investment advisors.
6
00:00:13,640 --> 00:00:15,580
We call it Something More because we'd like
7
00:00:15,580 --> 00:00:17,700
to talk not only about those important dollar
8
00:00:17,700 --> 00:00:19,900
and cents issues, but also the quality of
9
00:00:19,900 --> 00:00:22,320
life issues that make the money matters matter.
10
00:00:22,720 --> 00:00:26,080
Here he is, your fulfillment facilitator, your partner
11
00:00:26,080 --> 00:00:29,260
in prosperity, advising clients on Cape Cod and
12
00:00:29,260 --> 00:00:30,280
across the country.
13
00:00:30,680 --> 00:00:33,080
Here's your host, Jay Christopher Boyd.
14
00:00:33,700 --> 00:00:35,740
Welcome to Something More with Chris Boyd.
15
00:00:35,800 --> 00:00:37,660
I'm here with Jeff Perry and Russ Ball.
16
00:00:37,800 --> 00:00:39,900
We are all of the AMR team at
17
00:00:39,900 --> 00:00:41,440
Wealth Enhancement and glad to have you with
18
00:00:41,440 --> 00:00:41,700
us.
19
00:00:42,420 --> 00:00:46,580
Today, we are talking about concentrated stock or
20
00:00:46,580 --> 00:00:49,620
actually, I think we could even extend this
21
00:00:49,620 --> 00:00:54,520
to circumstances where you have embedded capital gains,
22
00:00:54,760 --> 00:00:57,520
high capital gains concerns, and how do you
23
00:00:57,520 --> 00:00:58,440
navigate those?
24
00:00:59,020 --> 00:01:01,040
And what are some techniques that we can
25
00:01:01,040 --> 00:01:02,340
try to help you think about that?
26
00:01:02,420 --> 00:01:04,900
We tend to see this often when people
27
00:01:04,900 --> 00:01:08,920
have a long-term legacy position in a
28
00:01:08,920 --> 00:01:09,380
stock.
29
00:01:10,360 --> 00:01:12,240
Maybe they inherited it and have had it
30
00:01:12,240 --> 00:01:13,000
for years.
31
00:01:13,460 --> 00:01:15,860
Maybe they worked in an industry and had
32
00:01:15,860 --> 00:01:18,040
a stock in that instance.
33
00:01:18,840 --> 00:01:21,240
It could be, and in other instances, we've
34
00:01:21,240 --> 00:01:23,860
even seen like real estate or other types
35
00:01:23,860 --> 00:01:27,680
of assets that have a lot of embedded,
36
00:01:27,860 --> 00:01:30,600
a business or whatever, they have a lot
37
00:01:30,600 --> 00:01:31,980
of embedded capital gain.
38
00:01:32,700 --> 00:01:36,260
And so how do you navigate trying to
39
00:01:36,260 --> 00:01:42,360
reduce that capital gains exposure or limit the
40
00:01:42,360 --> 00:01:45,680
risks when you have a concentrated stock?
41
00:01:45,820 --> 00:01:47,960
So there's different types of approaches and different
42
00:01:47,960 --> 00:01:49,760
ways we can navigate that.
43
00:01:50,520 --> 00:01:53,220
So let's talk about these a little bit.
44
00:01:54,140 --> 00:01:58,420
I was thinking, Russ, we've seemed like we
45
00:01:58,420 --> 00:02:00,220
keep running into this recently.
46
00:02:02,160 --> 00:02:05,260
What are some of the techniques that come
47
00:02:05,260 --> 00:02:05,700
to mind?
48
00:02:06,520 --> 00:02:06,680
Yeah.
49
00:02:06,740 --> 00:02:09,080
Well, I think when people start off with
50
00:02:09,080 --> 00:02:12,000
either concentrated in one position, like you said,
51
00:02:12,080 --> 00:02:13,980
or just legacy stocks that have been held
52
00:02:13,980 --> 00:02:16,060
over a long period of time since the
53
00:02:16,060 --> 00:02:19,900
90s or whatever, the question is, what do
54
00:02:19,900 --> 00:02:20,380
you do?
55
00:02:20,480 --> 00:02:22,140
How do you manage around that?
56
00:02:22,520 --> 00:02:25,740
And I think that's probably the most conservative
57
00:02:25,740 --> 00:02:26,220
option.
58
00:02:26,400 --> 00:02:29,260
We've been talking about concentrated stock recently.
59
00:02:29,960 --> 00:02:32,700
The most conservative option would be to manage
60
00:02:32,700 --> 00:02:34,500
what you can around those positions.
61
00:02:35,740 --> 00:02:37,700
But I don't want to sell them.
62
00:02:37,780 --> 00:02:38,880
I don't want to pay taxes.
63
00:02:39,280 --> 00:02:40,780
Yeah, that's a great point.
64
00:02:41,060 --> 00:02:43,180
So if I don't want to sell this
65
00:02:43,180 --> 00:02:46,060
position, well, first off, it's important to recognize,
66
00:02:46,140 --> 00:02:48,100
depending on the amount of scale, like how
67
00:02:48,100 --> 00:02:51,060
much we're in a particular position, this can
68
00:02:51,060 --> 00:02:54,100
add a magnitude of risk.
69
00:02:55,060 --> 00:02:58,660
So we generally think in terms of guidance
70
00:02:58,660 --> 00:03:02,000
for people to think around 5% of
71
00:03:02,000 --> 00:03:05,720
your investment portfolio in any one name, you
72
00:03:05,720 --> 00:03:07,780
get beyond that, you're starting to get to
73
00:03:07,780 --> 00:03:09,000
a point where you have more risk.
74
00:03:09,860 --> 00:03:12,060
Even if it's maybe 10%, it might depend
75
00:03:12,060 --> 00:03:14,960
on the stock, the kind of company it
76
00:03:14,960 --> 00:03:18,960
is, but how diversified within the company.
77
00:03:19,160 --> 00:03:22,140
You might have multiple companies, different areas of
78
00:03:22,140 --> 00:03:22,960
business within it.
79
00:03:25,360 --> 00:03:26,300
Berkshire Hathaway.
80
00:03:26,520 --> 00:03:27,660
Berkshire Hathaway is a good example.
81
00:03:27,800 --> 00:03:28,880
Procter & Gamble, something like that.
82
00:03:29,020 --> 00:03:31,160
It's many companies all in one stock.
83
00:03:32,480 --> 00:03:34,740
So that kind of thing, that's a good
84
00:03:34,740 --> 00:03:35,360
example.
85
00:03:36,200 --> 00:03:38,260
But even so, we typically would say if
86
00:03:38,260 --> 00:03:41,360
it's getting beyond that 5% range, we're
87
00:03:41,360 --> 00:03:44,660
getting extra magnitude of risk built into the
88
00:03:44,660 --> 00:03:45,140
portfolio.
89
00:03:45,460 --> 00:03:46,980
And so that's where we start to get
90
00:03:46,980 --> 00:03:47,260
nervous.
91
00:03:47,640 --> 00:03:51,060
So the one way we can try to
92
00:03:51,060 --> 00:03:52,700
manage the risk is by looking at the
93
00:03:52,700 --> 00:03:53,440
asset allocation.
94
00:03:53,640 --> 00:03:54,960
What's our overall allocation?
95
00:03:55,780 --> 00:03:58,680
And if we can, maybe there's places that
96
00:03:58,680 --> 00:04:03,440
we can reduce our overall exposure to risk,
97
00:04:03,600 --> 00:04:05,440
volatility, stock in this case.
98
00:04:06,460 --> 00:04:10,300
So we have had occasion where we talked
99
00:04:10,300 --> 00:04:11,700
about asset location.
100
00:04:13,600 --> 00:04:16,200
If we make those changes in our taxable
101
00:04:16,200 --> 00:04:19,300
accounts, well, there might be some tax consequences.
102
00:04:19,700 --> 00:04:22,760
But if we have non-taxable accounts or
103
00:04:22,760 --> 00:04:29,100
tax deferred, let's say, IRAs, 401ks, certainly Roth
104
00:04:29,100 --> 00:04:31,500
IRA too, but we tend to like to
105
00:04:31,500 --> 00:04:33,700
keep that for growth if we can.
106
00:04:34,560 --> 00:04:36,680
But these might be places where we could
107
00:04:36,680 --> 00:04:38,600
make a change, or if you had annuity
108
00:04:38,600 --> 00:04:39,220
assets.
109
00:04:40,180 --> 00:04:42,580
These might be places where you could rearrange
110
00:04:42,580 --> 00:04:45,420
the allocation of what kind of investments you
111
00:04:45,420 --> 00:04:47,600
own without a tax consequence.
112
00:04:48,840 --> 00:04:50,600
And you might be able to scale up
113
00:04:50,600 --> 00:04:56,060
the lower risk investments as a starting point
114
00:04:56,060 --> 00:04:58,240
without any tax consequence.
115
00:04:59,260 --> 00:05:00,680
So that's maybe step one.
116
00:05:00,760 --> 00:05:01,540
That's what you're driving at?
117
00:05:01,680 --> 00:05:02,500
Yeah, exactly.
118
00:05:02,660 --> 00:05:04,080
To take a look at everything else.
119
00:05:04,900 --> 00:05:08,280
And if you're, for whatever reason, locked into
120
00:05:08,280 --> 00:05:09,560
that position, either you have a lot of
121
00:05:09,560 --> 00:05:13,740
conviction, you're extremely attached to that position because
122
00:05:13,740 --> 00:05:14,480
that does happen.
123
00:05:15,240 --> 00:05:16,920
It's not always the best.
124
00:05:17,780 --> 00:05:19,640
That's probably not what we would prefer to
125
00:05:19,640 --> 00:05:23,780
have a sentimental attachment to specific positions, but
126
00:05:23,780 --> 00:05:24,480
it does happen.
127
00:05:25,160 --> 00:05:29,460
And I think another piece is, yes, on
128
00:05:29,460 --> 00:05:32,320
the asset allocation side to try to reduce
129
00:05:32,320 --> 00:05:34,580
risk in other areas, but also reducing risk
130
00:05:34,580 --> 00:05:36,220
away from that specific sector.
131
00:05:36,920 --> 00:05:39,540
So if it's a tech stock that this
132
00:05:39,540 --> 00:05:42,620
individual might have or whatever it may be,
133
00:05:42,820 --> 00:05:44,200
you can- Well, we have an example
134
00:05:44,200 --> 00:05:48,360
of an older gentleman who has telecom stocks.
135
00:05:48,640 --> 00:05:53,640
They've had- Acquired them through a ESOP,
136
00:05:53,960 --> 00:05:54,660
an employee.
137
00:05:55,300 --> 00:05:57,420
Or inherited or whatever.
138
00:05:57,660 --> 00:05:59,180
Either way, they got them.
139
00:05:59,520 --> 00:06:01,680
I was talking with a client recently where
140
00:06:02,620 --> 00:06:07,080
they went through the breakup and now come
141
00:06:07,080 --> 00:06:08,040
back together.
142
00:06:08,400 --> 00:06:11,680
They've been round trip on their telecom stocks.
143
00:06:12,340 --> 00:06:15,760
So the basis on these is nil.
144
00:06:17,300 --> 00:06:20,140
And on the one hand, you'd say, well,
145
00:06:20,140 --> 00:06:23,180
maybe I'd rather just hold onto it until
146
00:06:23,180 --> 00:06:25,340
I pass away because there's a step up
147
00:06:25,340 --> 00:06:28,160
in basis for my heirs.
148
00:06:29,560 --> 00:06:33,520
But there's also this, we're missing out on
149
00:06:33,520 --> 00:06:37,260
opportunity because the performance of these stocks isn't
150
00:06:37,260 --> 00:06:37,820
as good.
151
00:06:38,420 --> 00:06:41,280
The dividend is nice, but the overall performance
152
00:06:41,280 --> 00:06:42,940
has been subpar.
153
00:06:45,440 --> 00:06:48,700
So maybe how old I am is part
154
00:06:48,700 --> 00:06:49,820
of this equation, right?
155
00:06:50,460 --> 00:06:53,180
We have a case where we're dealing with
156
00:06:53,180 --> 00:06:57,140
a family who has the owner is in
157
00:06:57,140 --> 00:07:01,420
his 90s, I want to say, and some
158
00:07:01,420 --> 00:07:02,520
legacy stocks.
159
00:07:03,180 --> 00:07:05,580
Well, I get why.
160
00:07:05,800 --> 00:07:07,220
So how do we, in that case, maybe
161
00:07:07,220 --> 00:07:09,500
it's more about how do we mitigate risk?
162
00:07:11,300 --> 00:07:13,900
In some cases, it might be, where can
163
00:07:13,900 --> 00:07:15,540
we make some changes?
164
00:07:15,760 --> 00:07:17,040
There might be some low hanging fruit.
165
00:07:17,240 --> 00:07:20,240
Some of these stocks may actually be worth
166
00:07:20,240 --> 00:07:23,500
less than what they have as basis.
167
00:07:24,340 --> 00:07:26,960
And there can be opportunities to do some
168
00:07:26,960 --> 00:07:29,700
offsetting of capital gains with capital losses.
169
00:07:32,340 --> 00:07:34,560
But for example, if you owned, just as
170
00:07:34,560 --> 00:07:37,640
an example, if you own GE in the
171
00:07:37,640 --> 00:07:43,160
90s or the early 2000s, and it's seen
172
00:07:43,160 --> 00:07:46,240
drastic changes in the way GE is structured
173
00:07:46,240 --> 00:07:49,380
and priced and so forth, you might actually
174
00:07:49,380 --> 00:07:51,620
have a capital loss in your mix to
175
00:07:51,620 --> 00:07:52,260
draw from.
176
00:07:53,280 --> 00:07:55,820
And that could work against something else that
177
00:07:55,820 --> 00:07:57,880
you have as a big long-term capital
178
00:07:57,880 --> 00:08:00,360
gain, as an example.
179
00:08:01,680 --> 00:08:04,660
So in any case, but if we've got
180
00:08:04,660 --> 00:08:08,680
instances where we might have something we would
181
00:08:08,680 --> 00:08:12,280
like to try to hold on to because
182
00:08:12,280 --> 00:08:14,200
we'd rather have the step up in basis,
183
00:08:15,040 --> 00:08:17,480
what's a way we might be able to
184
00:08:17,480 --> 00:08:19,280
navigate the risks?
185
00:08:20,220 --> 00:08:23,800
Perhaps an option strategy could be a consideration.
186
00:08:23,800 --> 00:08:25,380
You want to talk about that, Russ?
187
00:08:26,220 --> 00:08:26,420
Yeah.
188
00:08:26,620 --> 00:08:31,159
So especially if you have one stock or
189
00:08:31,159 --> 00:08:33,100
a concentrated group of stocks, but really it
190
00:08:33,100 --> 00:08:34,780
works best, I think, if we're talking about
191
00:08:34,780 --> 00:08:35,320
one specific stock.
192
00:08:35,320 --> 00:08:37,539
A single position that's concentrated.
193
00:08:37,860 --> 00:08:37,960
Yep.
194
00:08:38,559 --> 00:08:41,280
If you say, this stock has done really
195
00:08:41,280 --> 00:08:44,760
well, I'm worried about how it's going to
196
00:08:44,760 --> 00:08:48,200
affect my overall portfolio if that stock plummets
197
00:08:48,200 --> 00:08:48,640
tomorrow.
198
00:08:49,160 --> 00:08:51,900
Because I've got such a large concentration in
199
00:08:51,900 --> 00:08:53,060
this one company.
200
00:08:53,980 --> 00:08:54,080
Yeah.
201
00:08:54,740 --> 00:08:55,680
So yeah.
202
00:08:56,000 --> 00:08:56,620
Go ahead.
203
00:08:56,860 --> 00:08:57,000
Yeah.
204
00:08:57,180 --> 00:09:00,840
Just that there are ways we can use
205
00:09:00,840 --> 00:09:03,980
an option strategy to hedge against that downside
206
00:09:03,980 --> 00:09:04,240
risk.
207
00:09:04,340 --> 00:09:08,600
So you'd basically be buying a put and
208
00:09:08,600 --> 00:09:09,760
I'll let you...
209
00:09:09,760 --> 00:09:09,960
Yeah.
210
00:09:10,020 --> 00:09:11,780
So I'll take on this.
211
00:09:12,300 --> 00:09:13,420
So I think we don't need to get
212
00:09:13,420 --> 00:09:15,100
too into the weeds on this.
213
00:09:15,620 --> 00:09:17,900
I think most people would say, options?
214
00:09:18,240 --> 00:09:20,120
I don't want to have risk.
215
00:09:20,420 --> 00:09:21,960
I'm trying to reduce my risk.
216
00:09:22,160 --> 00:09:25,320
And options sounds like, because of what we
217
00:09:25,320 --> 00:09:28,860
hear from people, oftentimes options are used for
218
00:09:28,860 --> 00:09:32,540
leverage to give me enhanced risk, but to
219
00:09:32,540 --> 00:09:35,420
try to get more juice in a portfolio.
220
00:09:35,900 --> 00:09:37,240
That's not what we're talking about here.
221
00:09:37,780 --> 00:09:39,700
Well, one of the ways options can be
222
00:09:39,700 --> 00:09:42,080
used is to mitigate downside risk.
223
00:09:42,200 --> 00:09:43,620
Think like an insurance policy.
224
00:09:44,140 --> 00:09:46,760
I can pay a premium, buy an insurance
225
00:09:46,760 --> 00:09:49,600
policy to mitigate my downside.
226
00:09:50,240 --> 00:09:52,540
And essentially, I might still have some downside,
227
00:09:52,740 --> 00:09:53,900
but I might be able to say, I
228
00:09:53,900 --> 00:09:56,520
want to put a floor on that downside.
229
00:09:56,800 --> 00:10:00,160
And usually when we do these approaches, so
230
00:10:00,160 --> 00:10:02,360
we're buying, we're paying a premium for that
231
00:10:02,360 --> 00:10:05,340
to protect that downside, but we might also
232
00:10:05,340 --> 00:10:10,340
sell an option to cap our upside so
233
00:10:10,340 --> 00:10:12,520
that it will help to pay for this
234
00:10:12,520 --> 00:10:13,060
insurance.
235
00:10:14,220 --> 00:10:16,640
And when we use a team that does
236
00:10:16,640 --> 00:10:20,960
this exclusively, oftentimes they can manage this in
237
00:10:20,960 --> 00:10:23,080
a way where we can try to avoid
238
00:10:23,080 --> 00:10:25,800
having an actual transaction occur.
239
00:10:26,820 --> 00:10:28,980
They can get rid of the contracts, roll
240
00:10:28,980 --> 00:10:35,120
the contracts and just keep moving the expiration
241
00:10:35,120 --> 00:10:38,900
date further down the line to avoid any
242
00:10:38,900 --> 00:10:42,860
kind of experience where we have to sell
243
00:10:42,860 --> 00:10:45,720
the security that we really don't want to
244
00:10:45,720 --> 00:10:46,880
sell for a tax purpose.
245
00:10:47,640 --> 00:10:52,380
So that's one possible way is this involved,
246
00:10:53,060 --> 00:10:58,320
but sophisticated way of mitigating risk through the
247
00:10:58,320 --> 00:11:01,100
use of options as a way to limit
248
00:11:01,100 --> 00:11:02,880
downside exposure.
249
00:11:03,700 --> 00:11:06,480
And it's important to recognize when you buy
250
00:11:06,480 --> 00:11:09,780
insurance, there's usually a premium involved.
251
00:11:09,920 --> 00:11:13,420
So there is some cost oftentimes when you're
252
00:11:13,420 --> 00:11:14,120
doing this.
253
00:11:14,740 --> 00:11:17,020
You can mitigate some of that cost and
254
00:11:17,020 --> 00:11:20,460
make it more manageable and not so painful
255
00:11:20,460 --> 00:11:21,280
in the process.
256
00:11:21,440 --> 00:11:25,580
But I think we probably overlooked the first
257
00:11:25,580 --> 00:11:28,360
and most obvious choice of when you have
258
00:11:28,360 --> 00:11:29,080
this issue.
259
00:11:30,220 --> 00:11:33,400
If you've got concentrated stock, you don't really
260
00:11:33,400 --> 00:11:34,400
want to pay the tax.
261
00:11:35,640 --> 00:11:39,280
But in some cases, we've had clients and
262
00:11:39,280 --> 00:11:45,660
friends who've had a concentrated position, had a
263
00:11:45,660 --> 00:11:48,820
huge run up, felt great, made a lot
264
00:11:48,820 --> 00:11:51,960
of money, but I don't want to pay
265
00:11:51,960 --> 00:11:52,540
that tax.
266
00:11:53,960 --> 00:11:55,680
And they chose not to.
267
00:11:56,480 --> 00:12:00,100
Well, and the good news is the stock
268
00:12:00,100 --> 00:12:01,840
has changed in price and they don't have
269
00:12:01,840 --> 00:12:06,520
a capital gains tax anymore, but that's not
270
00:12:06,520 --> 00:12:07,380
always the good news.
271
00:12:07,500 --> 00:12:10,280
That's bad news too, that the price has
272
00:12:10,280 --> 00:12:10,560
changed.
273
00:12:11,020 --> 00:12:15,220
So sometimes it's worth biting the bullet, just
274
00:12:15,220 --> 00:12:17,860
recognizing you don't own all the value of
275
00:12:17,860 --> 00:12:18,400
that stock.
276
00:12:18,520 --> 00:12:20,380
Uncle Sam's got a claim on some of
277
00:12:20,380 --> 00:12:20,740
the gain.
278
00:12:21,300 --> 00:12:26,200
And so many people put the primary decision
279
00:12:26,200 --> 00:12:29,980
as the tax consequence of whether or not
280
00:12:29,980 --> 00:12:31,480
to sell an investment.
281
00:12:31,620 --> 00:12:35,900
And that's a factor, but it's really not
282
00:12:35,900 --> 00:12:37,020
the most important factor.
283
00:12:37,020 --> 00:12:39,820
The most important factor from my perspective is
284
00:12:39,820 --> 00:12:42,140
what's the outlook for the stock?
285
00:12:43,440 --> 00:12:45,480
Is it in a growing industry?
286
00:12:45,760 --> 00:12:47,380
Are their earnings good?
287
00:12:47,440 --> 00:12:49,080
Is the company being managed right?
288
00:12:49,080 --> 00:12:50,460
Is it in the right sector?
289
00:12:50,840 --> 00:12:52,320
Where are we in the business cycle?
290
00:12:52,340 --> 00:12:54,720
All these things that Brian and you do,
291
00:12:55,080 --> 00:12:57,820
Chris, when you're analyzing a stock, either fundamentally
292
00:12:57,820 --> 00:13:01,280
or technically, but that should be question one.
293
00:13:01,460 --> 00:13:02,680
I own this stock.
294
00:13:03,100 --> 00:13:04,720
Is the future of the stock positive?
295
00:13:06,000 --> 00:13:08,880
That's a whole different analysis than holding some
296
00:13:08,880 --> 00:13:13,100
old industrial company because you've got a large
297
00:13:13,100 --> 00:13:15,540
capital gain that's in a business that is
298
00:13:15,540 --> 00:13:16,960
questionable for the future.
299
00:13:17,680 --> 00:13:19,820
We had a conversation with someone who thinks
300
00:13:19,820 --> 00:13:21,280
the company is great that they have a
301
00:13:21,280 --> 00:13:23,680
concentrated position in, but they think it's kind
302
00:13:23,680 --> 00:13:25,040
of had a good run and maybe it's
303
00:13:25,040 --> 00:13:26,360
a little overpriced right now.
304
00:13:26,740 --> 00:13:30,180
What if you're someone else who says, well,
305
00:13:30,320 --> 00:13:31,900
it's not the stock I don't like.
306
00:13:32,100 --> 00:13:34,820
I think we're poised for a downturn with
307
00:13:34,820 --> 00:13:36,680
the markets or the economy.
308
00:13:36,940 --> 00:13:39,580
We're in a position where the outlook isn't
309
00:13:39,580 --> 00:13:40,200
as good.
310
00:13:40,460 --> 00:13:41,520
Or even the sector, right?
311
00:13:41,800 --> 00:13:42,780
Or the sector, right?
312
00:13:42,840 --> 00:13:45,620
So those are all variables that make it
313
00:13:45,620 --> 00:13:47,040
more difficult to navigate.
314
00:13:48,100 --> 00:13:49,960
On the one hand, I want to say,
315
00:13:50,060 --> 00:13:53,020
one of the options is you could sell.
316
00:13:55,420 --> 00:13:56,320
It's painful.
317
00:13:56,600 --> 00:14:02,240
Nobody likes taxes, but on some level, historically,
318
00:14:02,620 --> 00:14:05,420
taxes are relatively inexpensive today.
319
00:14:05,900 --> 00:14:07,120
That's a good point too, right?
320
00:14:07,180 --> 00:14:09,620
It may not be a bad thing to
321
00:14:09,620 --> 00:14:10,100
consider.
322
00:14:10,380 --> 00:14:10,500
All right.
323
00:14:10,600 --> 00:14:11,400
So that's one option.
324
00:14:11,440 --> 00:14:13,600
And not an all or nothing proposition too.
325
00:14:13,600 --> 00:14:14,340
Absolutely right.
326
00:14:14,560 --> 00:14:14,700
All right.
327
00:14:14,860 --> 00:14:16,200
So that's one option.
328
00:14:16,300 --> 00:14:19,040
We have a gentleman who has capital gains
329
00:14:19,040 --> 00:14:21,420
from real estate that they're dealing with.
330
00:14:22,300 --> 00:14:24,400
And we're trying to navigate that.
331
00:14:24,560 --> 00:14:27,600
Let's talk about the idea of how do
332
00:14:27,600 --> 00:14:33,660
we try to manage capital gains through the
333
00:14:33,660 --> 00:14:36,820
try to create a mechanism where we can
334
00:14:36,820 --> 00:14:41,200
generate intentionally, generate capital losses.
335
00:14:42,640 --> 00:14:44,360
So this is another possibility.
336
00:14:44,540 --> 00:14:45,800
You want to start and I'll jump in?
337
00:14:45,980 --> 00:14:46,080
Yeah.
338
00:14:46,080 --> 00:14:48,060
Well, I think it's important to remember that
339
00:14:48,060 --> 00:14:51,580
capital gains and losses are not just in
340
00:14:51,580 --> 00:14:53,220
your stock portfolio.
341
00:14:53,560 --> 00:14:55,620
They're also, like you said, if you're selling
342
00:14:55,620 --> 00:14:57,800
a business, if you're selling a home, capital
343
00:14:57,800 --> 00:15:00,740
gains- Like a rental property or like
344
00:15:00,740 --> 00:15:02,620
an investment property type of- Yeah.
345
00:15:02,740 --> 00:15:03,560
I mean, or your own property.
346
00:15:03,560 --> 00:15:03,660
Yeah.
347
00:15:03,780 --> 00:15:05,380
I guess it's after a certain amount of
348
00:15:05,380 --> 00:15:05,680
gain.
349
00:15:05,940 --> 00:15:06,100
Right.
350
00:15:06,180 --> 00:15:07,280
Depending on the value, right?
351
00:15:07,440 --> 00:15:07,660
Yeah.
352
00:15:08,360 --> 00:15:11,500
So those gains, they're still capital gains when
353
00:15:11,500 --> 00:15:13,060
you sell a house and they could be
354
00:15:13,060 --> 00:15:16,540
offset by losses in your stock portfolio because
355
00:15:16,540 --> 00:15:17,720
those are capital losses.
356
00:15:18,720 --> 00:15:24,100
So one option is, it can get a
357
00:15:24,100 --> 00:15:25,880
little bit into the weeds to go into
358
00:15:25,880 --> 00:15:28,900
the details, but it's based on a direct
359
00:15:28,900 --> 00:15:30,700
indexing sort of approach.
360
00:15:31,160 --> 00:15:34,680
And direct indexing basically is you look at
361
00:15:34,680 --> 00:15:37,220
a portfolio like the S&P 500 and
362
00:15:37,220 --> 00:15:39,860
rather than buying a mutual fund or ETF
363
00:15:39,860 --> 00:15:43,380
that contains all of it in one security,
364
00:15:44,020 --> 00:15:45,160
you're saying, I'm going to break that up.
365
00:15:45,280 --> 00:15:47,600
I'm going to buy a number, a hundreds
366
00:15:47,600 --> 00:15:50,100
sometimes of those stocks in the portfolio.
367
00:15:50,440 --> 00:15:50,940
Yeah.
368
00:15:50,940 --> 00:15:52,700
So it moves in a way that's similar
369
00:15:52,700 --> 00:15:53,700
to that index.
370
00:15:54,840 --> 00:15:57,400
But in the midst of that, with all
371
00:15:57,400 --> 00:16:00,960
these individual positions, some of them go down.
372
00:16:01,740 --> 00:16:06,940
And we could replace those positions that went
373
00:16:06,940 --> 00:16:10,880
down with something that's very similar.
374
00:16:11,140 --> 00:16:13,620
So we'll stay invested in a way that
375
00:16:13,620 --> 00:16:16,160
it still continues to look like the index,
376
00:16:16,620 --> 00:16:19,660
but I can capture all these little moves
377
00:16:19,660 --> 00:16:25,780
on the downside to benefit from that capital
378
00:16:25,780 --> 00:16:29,540
loss, that decline in value for a small
379
00:16:29,540 --> 00:16:32,940
piece of the mix and harvest that to
380
00:16:32,940 --> 00:16:35,780
help me manage gains that I have to
381
00:16:35,780 --> 00:16:36,520
deal with elsewhere.
382
00:16:38,200 --> 00:16:41,540
And in some instances, we might even leverage
383
00:16:41,540 --> 00:16:45,440
that where we have a long short strategy
384
00:16:45,440 --> 00:16:48,860
paired with that, where we're going to put
385
00:16:48,860 --> 00:16:53,420
a little bit more exposure on top and
386
00:16:53,420 --> 00:16:56,920
below, where if we're buying long and selling
387
00:16:56,920 --> 00:17:01,440
short, and if the market goes up, well,
388
00:17:01,580 --> 00:17:03,339
one portion of that is going to make
389
00:17:03,339 --> 00:17:05,000
money, but another portion of that is going
390
00:17:05,000 --> 00:17:05,520
to lose money.
391
00:17:05,680 --> 00:17:09,240
The short portion would have losses.
392
00:17:09,920 --> 00:17:13,839
If we see the market go down, well,
393
00:17:14,060 --> 00:17:17,700
the long portion has losses, but the short
394
00:17:17,700 --> 00:17:18,760
portion will have made money.
395
00:17:18,900 --> 00:17:22,060
So we're neutral to what happens in the
396
00:17:22,060 --> 00:17:26,339
market because we've got long and short, but
397
00:17:26,339 --> 00:17:29,120
invariably, some portion of that will give us
398
00:17:29,120 --> 00:17:32,060
an opportunity to harvest losses.
399
00:17:33,300 --> 00:17:36,200
And we can use that in a way
400
00:17:36,200 --> 00:17:43,700
to try to capture some tax benefit now
401
00:17:44,580 --> 00:17:46,760
and use that as a way to help
402
00:17:46,760 --> 00:17:49,200
to offset that gain.
403
00:17:49,280 --> 00:17:50,800
We might be dealing with that real estate,
404
00:17:50,800 --> 00:17:53,180
or in the case of the concentrated position,
405
00:17:53,400 --> 00:17:55,740
we might be able to sell some holdings
406
00:17:55,740 --> 00:17:59,780
to help mitigate that risk, that tax, and
407
00:17:59,780 --> 00:18:02,460
to diversify from the risk that we have
408
00:18:02,460 --> 00:18:03,600
in the concentrated stock.
409
00:18:04,220 --> 00:18:06,500
And one additional benefit is that when you
410
00:18:06,500 --> 00:18:09,900
generate those losses, let's say you get into
411
00:18:09,900 --> 00:18:12,800
one of these strategies and the market starts
412
00:18:12,800 --> 00:18:15,840
going down right away, you start racking up
413
00:18:15,840 --> 00:18:18,700
losses, it's not going to feel great because
414
00:18:18,700 --> 00:18:20,640
you're kind of going along the ride with
415
00:18:20,640 --> 00:18:22,800
the market, but you're also generating losses that
416
00:18:22,800 --> 00:18:25,660
you can carry forward year after year, as
417
00:18:25,660 --> 00:18:27,520
long as you live, really.
418
00:18:27,740 --> 00:18:30,740
Yeah, we have someone who has this kind
419
00:18:30,740 --> 00:18:34,260
of a circumstance with a future sale of
420
00:18:34,260 --> 00:18:35,640
an appreciated asset.
421
00:18:35,880 --> 00:18:38,980
It's not today, but they know they're thinking
422
00:18:38,980 --> 00:18:44,360
of selling this appreciated asset and want to
423
00:18:44,360 --> 00:18:48,440
be prepared for the future gains.
424
00:18:49,020 --> 00:18:51,220
So they're locking in losses to sort of
425
00:18:51,220 --> 00:18:53,760
capture those so that then they just stay.
426
00:18:54,400 --> 00:18:57,840
You get to deduct $3,000 a year,
427
00:18:58,280 --> 00:19:00,260
so they might diminish a little bit over
428
00:19:00,260 --> 00:19:02,920
time, but you've banked those losses so you
429
00:19:02,920 --> 00:19:04,920
can use them against future gains, and it's
430
00:19:04,920 --> 00:19:06,440
another date down the road.
431
00:19:07,300 --> 00:19:10,120
So that can also be, with some forethought,
432
00:19:10,240 --> 00:19:13,280
some time to prepare, you can be better
433
00:19:13,280 --> 00:19:15,820
situated for when you have that.
434
00:19:16,860 --> 00:19:19,080
So it's an unusual thought process.
435
00:19:19,240 --> 00:19:24,340
I think sometimes we talk about capturing losses
436
00:19:24,340 --> 00:19:28,280
and harvesting losses, and people think, why would
437
00:19:28,280 --> 00:19:29,440
you want to have losses?
438
00:19:29,760 --> 00:19:31,900
You don't necessarily want to have losses.
439
00:19:32,100 --> 00:19:37,340
But in this case, we can intentionally set
440
00:19:37,340 --> 00:19:40,380
out to manipulate the structure of things so
441
00:19:40,380 --> 00:19:42,700
that we can gather those losses to help
442
00:19:42,700 --> 00:19:43,880
offset taxes.
443
00:19:44,580 --> 00:19:47,080
And that is another form of return.
444
00:19:47,260 --> 00:19:49,440
It's not what you make, it's what you
445
00:19:49,440 --> 00:19:49,820
keep.
446
00:19:50,540 --> 00:19:53,020
So this helps us to have what they
447
00:19:53,020 --> 00:19:54,000
call tax alpha.
448
00:19:54,400 --> 00:19:57,080
We're going to have some added benefit and
449
00:19:57,080 --> 00:20:02,040
have a better effective outcome because of trying
450
00:20:02,040 --> 00:20:03,760
to mitigate some of that tax burden.
451
00:20:03,840 --> 00:20:05,820
And it may be that we still have
452
00:20:05,820 --> 00:20:08,520
some tax burden down the road, but in
453
00:20:08,520 --> 00:20:11,600
the case of, say, the concentrated position or
454
00:20:11,600 --> 00:20:16,540
the instance of the real estate that we're
455
00:20:16,540 --> 00:20:19,540
trying to avoid a tax on, this gives
456
00:20:19,540 --> 00:20:23,320
us the opportunity to push that problem down
457
00:20:23,320 --> 00:20:24,380
the road a little bit.
458
00:20:24,480 --> 00:20:26,900
And in the case of some of these,
459
00:20:27,000 --> 00:20:29,080
it gives us more opportunity for more diversification,
460
00:20:29,440 --> 00:20:30,240
which may be...
461
00:20:30,240 --> 00:20:31,980
That's what I was going to comment on,
462
00:20:32,080 --> 00:20:34,460
that you're doing that strategy in the context
463
00:20:34,460 --> 00:20:37,740
of a broad-based index situation.
464
00:20:38,220 --> 00:20:41,720
So you're, in essence, have that diversification, not
465
00:20:41,720 --> 00:20:44,080
only by company, but also by sector and
466
00:20:44,080 --> 00:20:45,060
so forth.
467
00:20:45,700 --> 00:20:48,480
So you're not trying to pick winners and
468
00:20:48,480 --> 00:20:48,760
losers.
469
00:20:49,200 --> 00:20:51,300
You're doing it in a context of what
470
00:20:51,300 --> 00:20:52,480
a lot of people like to do is
471
00:20:52,480 --> 00:20:53,360
invest in index.
472
00:20:53,360 --> 00:20:54,040
Yeah.
473
00:20:55,020 --> 00:20:57,100
And there's a certain efficiency there.
474
00:20:57,460 --> 00:20:59,180
But in our case, what we're really just
475
00:20:59,180 --> 00:21:01,080
trying to do is diminish risk.
476
00:21:01,920 --> 00:21:04,520
And that can give us a way to
477
00:21:04,520 --> 00:21:06,180
effectively accomplish that.
478
00:21:07,060 --> 00:21:10,000
So there are other techniques that are even
479
00:21:10,000 --> 00:21:14,560
more involved and sophisticated that maybe go beyond
480
00:21:14,560 --> 00:21:17,260
the scope of a program like this.
481
00:21:17,540 --> 00:21:20,500
But I think it's important to just recognize
482
00:21:20,500 --> 00:21:23,520
that this is a challenge that people...
483
00:21:23,520 --> 00:21:27,520
It's not unique to have this difficulty of
484
00:21:27,520 --> 00:21:33,820
either a long-held stock position, even if
485
00:21:33,820 --> 00:21:37,520
it's inherited, maybe inherited from a parent or
486
00:21:37,520 --> 00:21:37,820
something.
487
00:21:38,140 --> 00:21:39,140
And this is very common.
488
00:21:39,260 --> 00:21:41,500
People have stuff, they just hold onto it
489
00:21:41,500 --> 00:21:42,340
and never change it.
490
00:21:43,060 --> 00:21:45,600
And then now, 20 years later or whatever
491
00:21:45,600 --> 00:21:49,180
it might be, you're faced with, oh, maybe
492
00:21:49,180 --> 00:21:51,720
I should think about my investments in a
493
00:21:51,720 --> 00:21:54,280
strategy that's appropriate for me.
494
00:21:54,960 --> 00:21:56,080
What should I do?
495
00:21:56,500 --> 00:22:00,260
And there's all this embedded tax concern.
496
00:22:01,420 --> 00:22:03,100
So that's not unusual.
497
00:22:03,500 --> 00:22:06,700
It's not unusual for people to have stock
498
00:22:06,700 --> 00:22:11,260
maybe from an employer, maybe to have real
499
00:22:11,260 --> 00:22:15,280
estate that's appreciated, a business that's appreciated.
500
00:22:16,240 --> 00:22:18,560
And having the reality that we've got a
501
00:22:18,560 --> 00:22:20,800
gain that we're going to be faced with,
502
00:22:21,040 --> 00:22:25,440
how do we manage that gain and try
503
00:22:25,440 --> 00:22:29,300
to offset some of that gain through the
504
00:22:29,300 --> 00:22:31,440
use of a technique like this to help
505
00:22:31,440 --> 00:22:37,900
diminish capital gains exposure by capturing losses along
506
00:22:37,900 --> 00:22:41,180
the way or by mitigating the risk through
507
00:22:41,180 --> 00:22:43,320
the use of options as a way to
508
00:22:43,320 --> 00:22:44,720
navigate that.
509
00:22:46,300 --> 00:22:49,060
Or just looking at your overall portfolio and
510
00:22:49,060 --> 00:22:50,880
looking at where there are places where we
511
00:22:50,880 --> 00:22:53,540
can do some changes without some tax burden
512
00:22:53,540 --> 00:22:55,800
to help manage risk.
513
00:22:56,460 --> 00:22:57,900
There's a variety of things to look at.
514
00:22:58,160 --> 00:22:59,640
It's best done in the context of a
515
00:22:59,640 --> 00:23:00,200
financial plan.
516
00:23:00,640 --> 00:23:01,120
Is that where you're going?
517
00:23:01,300 --> 00:23:01,400
Absolutely.
518
00:23:01,460 --> 00:23:03,040
No, I was just going to say that
519
00:23:03,040 --> 00:23:06,200
it's also not like you have to choose
520
00:23:06,200 --> 00:23:08,560
one solution and go with that.
521
00:23:09,260 --> 00:23:10,860
We try to take a look at it
522
00:23:10,860 --> 00:23:13,760
all within that financial plan context as well.
523
00:23:14,180 --> 00:23:15,920
But we look at the whole picture and
524
00:23:15,920 --> 00:23:17,580
we decide, all right, here's what we're going
525
00:23:17,580 --> 00:23:18,420
to do with this piece.
526
00:23:18,520 --> 00:23:19,820
Here's what we would do with this piece.
527
00:23:20,720 --> 00:23:24,640
And maybe some hedging, some tax loss harvesting,
528
00:23:25,220 --> 00:23:27,580
rather than it all being in one specific
529
00:23:27,580 --> 00:23:28,620
strategy.
530
00:23:29,000 --> 00:23:30,580
I remember a couple of clients we've worked
531
00:23:30,580 --> 00:23:34,360
with years past where we had this issue,
532
00:23:34,780 --> 00:23:38,560
appreciated assets, but we also had the desire
533
00:23:38,560 --> 00:23:41,520
for income over a lifetime.
534
00:23:43,200 --> 00:23:48,500
And in some instances, some charitable intentions.
535
00:23:49,200 --> 00:23:54,900
Sometimes people prioritize charitable intent and other times
536
00:23:54,900 --> 00:23:58,400
people just prioritize mitigating, avoiding capital gains.
537
00:23:59,140 --> 00:24:02,820
We talk about a charitable remainder trust, also
538
00:24:02,820 --> 00:24:05,420
known as a capital gains avoidance trust.
539
00:24:06,100 --> 00:24:08,740
It's really more of a, it's not avoidance,
540
00:24:08,920 --> 00:24:12,620
but you're not getting hit with it all
541
00:24:12,620 --> 00:24:13,020
at once.
542
00:24:13,220 --> 00:24:15,000
It's a graduate, you can push it off.
543
00:24:15,920 --> 00:24:19,060
But the idea of taking some position that's
544
00:24:19,060 --> 00:24:22,600
concentrated with a lot of capital gains in
545
00:24:22,600 --> 00:24:25,340
it, we've done this a number of times
546
00:24:25,340 --> 00:24:32,500
where people have donated that stock to this
547
00:24:32,500 --> 00:24:38,480
charitable intention eventually, but get a charitable deduction
548
00:24:38,480 --> 00:24:39,300
right up front.
549
00:24:39,460 --> 00:24:42,860
So some immediate tax benefit and the ability
550
00:24:42,860 --> 00:24:44,820
to then derive income.
551
00:24:44,980 --> 00:24:47,360
We can reposition in the trust that stock
552
00:24:47,360 --> 00:24:50,660
into something that's more diversified and more balanced
553
00:24:50,660 --> 00:24:53,460
and structure it where they can generate a
554
00:24:53,460 --> 00:24:58,960
cashflow from this for themselves, for themselves and
555
00:24:58,960 --> 00:24:59,420
a spouse.
556
00:24:59,560 --> 00:25:01,200
We have one woman who did it with
557
00:25:01,200 --> 00:25:04,020
herself, her spouse, and her sibling.
558
00:25:04,760 --> 00:25:06,300
So as long as any one of them
559
00:25:06,300 --> 00:25:09,940
is alive and their assets remain in the
560
00:25:09,940 --> 00:25:13,540
trust that there's still presumably going to outlive
561
00:25:13,540 --> 00:25:18,880
them all, there's income stream provided to them.
562
00:25:19,380 --> 00:25:21,700
And there's different ways to structure a charitable
563
00:25:21,700 --> 00:25:22,760
remainder trust.
564
00:25:22,940 --> 00:25:25,700
One that's geared to try to maximize income
565
00:25:25,700 --> 00:25:31,880
to the family, the donors, the beneficiaries, but
566
00:25:31,880 --> 00:25:36,020
there's also some that are more regimented, but
567
00:25:36,020 --> 00:25:38,060
can have more growth so that there's more
568
00:25:38,060 --> 00:25:41,460
for the charitable intentions later on.
569
00:25:41,460 --> 00:25:42,800
So depending on what we're trying to do,
570
00:25:42,880 --> 00:25:44,340
there's ways to structure that.
571
00:25:45,260 --> 00:25:48,580
There are other techniques as well that are
572
00:25:48,580 --> 00:25:49,980
state planning techniques.
573
00:25:50,880 --> 00:25:52,440
I think I mentioned one to you.
574
00:25:52,500 --> 00:25:54,440
I didn't even remember now what it was.
575
00:25:54,520 --> 00:25:56,220
Do you remember what my brother mentioned something
576
00:25:56,220 --> 00:25:58,140
to me just today?
577
00:26:00,100 --> 00:26:01,480
I'll look it up.
578
00:26:03,560 --> 00:26:05,860
And that may be something we want to
579
00:26:05,860 --> 00:26:07,960
look into for people as well in their
580
00:26:07,960 --> 00:26:10,660
estate planning, but a deferred sales trust is
581
00:26:10,660 --> 00:26:12,540
another technique he was talking about.
582
00:26:12,980 --> 00:26:16,120
So the estate planning can provide some interesting
583
00:26:16,120 --> 00:26:19,020
opportunities as well that we can try to
584
00:26:19,020 --> 00:26:21,820
collaborate with all these various ways of trying
585
00:26:21,820 --> 00:26:26,920
to manage how best to handle these appreciated
586
00:26:26,920 --> 00:26:27,580
assets.
587
00:26:27,940 --> 00:26:31,480
And the time horizon involved is certainly relevant.
588
00:26:31,480 --> 00:26:32,900
It might be.
589
00:26:33,200 --> 00:26:35,820
The solution or the mitigation of these taxes
590
00:26:35,820 --> 00:26:37,460
may be a multi-year approach.
591
00:26:38,100 --> 00:26:39,760
Yeah, yeah, exactly.
592
00:26:39,980 --> 00:26:40,480
Good point.
593
00:26:41,180 --> 00:26:45,040
And so let's just kind of wind it
594
00:26:45,040 --> 00:26:47,860
down to say that this is all best
595
00:26:47,860 --> 00:26:50,180
done in the context of a financial plan.
596
00:26:50,320 --> 00:26:52,580
So we know how all the pieces fit
597
00:26:52,580 --> 00:26:53,060
together.
598
00:26:53,660 --> 00:26:58,300
We can think about estate planning considerations and
599
00:26:58,300 --> 00:27:00,240
charitable giving considerations.
600
00:27:00,860 --> 00:27:03,080
Think about some of these techniques we've just
601
00:27:03,080 --> 00:27:06,220
elaborated on and the context of the portfolio,
602
00:27:06,400 --> 00:27:08,300
how the rest of all those pieces fit
603
00:27:08,300 --> 00:27:08,700
together.
604
00:27:09,000 --> 00:27:10,980
If you're faced with some of these kinds
605
00:27:10,980 --> 00:27:13,240
of issues, you're not alone.
606
00:27:13,560 --> 00:27:16,040
There's lots of people who have similar kind
607
00:27:16,040 --> 00:27:18,340
of challenges and a little bit of planning
608
00:27:18,340 --> 00:27:21,100
can go a long way and helping you
609
00:27:21,100 --> 00:27:23,020
to navigate that tax cost.
610
00:27:23,460 --> 00:27:25,060
Russ and I were just talking last night
611
00:27:25,060 --> 00:27:28,940
and saying, it seems like tax priorities, tax
612
00:27:28,940 --> 00:27:32,460
issues, it's more on people's minds today than
613
00:27:32,460 --> 00:27:33,180
ever before.
614
00:27:33,400 --> 00:27:38,900
How do I navigate and manage my expenses
615
00:27:38,900 --> 00:27:41,700
when it comes to tax costs as part
616
00:27:41,700 --> 00:27:43,180
of my investment strategies?
617
00:27:44,240 --> 00:27:48,280
It's probably more than ever on people's minds.
618
00:27:48,280 --> 00:27:51,660
There are some great resources and techniques.
619
00:27:52,440 --> 00:27:55,000
And if you need help navigating how that
620
00:27:55,000 --> 00:27:57,820
works for you, give us a call, reach
621
00:27:57,820 --> 00:27:58,080
out.
622
00:27:58,240 --> 00:28:00,060
Don't hesitate to try to see if we
623
00:28:00,060 --> 00:28:01,980
can be a resource in helping you figure
624
00:28:01,980 --> 00:28:05,380
out what's the best path forward, not only
625
00:28:05,380 --> 00:28:08,400
for your portfolio, but for your overall life
626
00:28:08,400 --> 00:28:10,520
circumstances for your financial plan.
627
00:28:10,780 --> 00:28:13,660
So with that, thanks for being with us.
628
00:28:13,980 --> 00:28:15,440
And if any way we can be of
629
00:28:15,440 --> 00:28:16,340
help, reach out.
630
00:28:16,540 --> 00:28:18,920
Until next time, keep striving for something more.
631
00:28:45,800 --> 00:28:48,780
AMR-info at wealthenhancement.com.
632
00:28:49,160 --> 00:28:50,900
You're listening to something more with Chris Boyd
633
00:28:50,900 --> 00:28:51,740
Financial Talk Show.
634
00:28:51,900 --> 00:28:54,340
Wealth Enhancement Advisory Services and Jay Christopher Boyd
635
00:28:54,340 --> 00:28:56,660
provide investment advice on an individual basis to
636
00:28:56,660 --> 00:28:57,220
clients only.
637
00:28:57,360 --> 00:28:59,360
Proper advice depends on a complete analysis of
638
00:28:59,360 --> 00:29:00,520
all facts and circumstances.
639
00:29:00,780 --> 00:29:02,640
The information given on this program is general
640
00:29:02,640 --> 00:29:04,680
financial comments and cannot be relied upon as
641
00:29:04,680 --> 00:29:06,240
pertaining to your specific situation.
642
00:29:06,440 --> 00:29:08,420
Wealth Enhancement Group cannot guarantee that using the
643
00:29:08,420 --> 00:29:10,440
information from this show will generate profits or
644
00:29:10,440 --> 00:29:11,600
ensure freedom from loss.
645
00:29:11,740 --> 00:29:13,900
Listeners should consult their own financial advisors or
646
00:29:13,900 --> 00:29:16,020
conduct their own due diligence before making any
647
00:29:16,020 --> 00:29:16,780
financial decisions.
00:00:00,780 --> 00:00:03,300
Welcome to Something More with Chris Boyd.
2
00:00:03,680 --> 00:00:06,620
Chris Boyd is a Certified Financial Planner Practitioner
3
00:00:06,620 --> 00:00:09,240
and Senior Vice President and Financial Advisor at
4
00:00:09,240 --> 00:00:11,540
Wealth Enhancement Group, one of the nation's largest
5
00:00:11,540 --> 00:00:13,140
registered investment advisors.
6
00:00:13,640 --> 00:00:15,580
We call it Something More because we'd like
7
00:00:15,580 --> 00:00:17,700
to talk not only about those important dollar
8
00:00:17,700 --> 00:00:19,900
and cents issues, but also the quality of
9
00:00:19,900 --> 00:00:22,320
life issues that make the money matters matter.
10
00:00:22,720 --> 00:00:26,080
Here he is, your fulfillment facilitator, your partner
11
00:00:26,080 --> 00:00:29,260
in prosperity, advising clients on Cape Cod and
12
00:00:29,260 --> 00:00:30,280
across the country.
13
00:00:30,680 --> 00:00:33,080
Here's your host, Jay Christopher Boyd.
14
00:00:33,700 --> 00:00:35,740
Welcome to Something More with Chris Boyd.
15
00:00:35,800 --> 00:00:37,660
I'm here with Jeff Perry and Russ Ball.
16
00:00:37,800 --> 00:00:39,900
We are all of the AMR team at
17
00:00:39,900 --> 00:00:41,440
Wealth Enhancement and glad to have you with
18
00:00:41,440 --> 00:00:41,700
us.
19
00:00:42,420 --> 00:00:46,580
Today, we are talking about concentrated stock or
20
00:00:46,580 --> 00:00:49,620
actually, I think we could even extend this
21
00:00:49,620 --> 00:00:54,520
to circumstances where you have embedded capital gains,
22
00:00:54,760 --> 00:00:57,520
high capital gains concerns, and how do you
23
00:00:57,520 --> 00:00:58,440
navigate those?
24
00:00:59,020 --> 00:01:01,040
And what are some techniques that we can
25
00:01:01,040 --> 00:01:02,340
try to help you think about that?
26
00:01:02,420 --> 00:01:04,900
We tend to see this often when people
27
00:01:04,900 --> 00:01:08,920
have a long-term legacy position in a
28
00:01:08,920 --> 00:01:09,380
stock.
29
00:01:10,360 --> 00:01:12,240
Maybe they inherited it and have had it
30
00:01:12,240 --> 00:01:13,000
for years.
31
00:01:13,460 --> 00:01:15,860
Maybe they worked in an industry and had
32
00:01:15,860 --> 00:01:18,040
a stock in that instance.
33
00:01:18,840 --> 00:01:21,240
It could be, and in other instances, we've
34
00:01:21,240 --> 00:01:23,860
even seen like real estate or other types
35
00:01:23,860 --> 00:01:27,680
of assets that have a lot of embedded,
36
00:01:27,860 --> 00:01:30,600
a business or whatever, they have a lot
37
00:01:30,600 --> 00:01:31,980
of embedded capital gain.
38
00:01:32,700 --> 00:01:36,260
And so how do you navigate trying to
39
00:01:36,260 --> 00:01:42,360
reduce that capital gains exposure or limit the
40
00:01:42,360 --> 00:01:45,680
risks when you have a concentrated stock?
41
00:01:45,820 --> 00:01:47,960
So there's different types of approaches and different
42
00:01:47,960 --> 00:01:49,760
ways we can navigate that.
43
00:01:50,520 --> 00:01:53,220
So let's talk about these a little bit.
44
00:01:54,140 --> 00:01:58,420
I was thinking, Russ, we've seemed like we
45
00:01:58,420 --> 00:02:00,220
keep running into this recently.
46
00:02:02,160 --> 00:02:05,260
What are some of the techniques that come
47
00:02:05,260 --> 00:02:05,700
to mind?
48
00:02:06,520 --> 00:02:06,680
Yeah.
49
00:02:06,740 --> 00:02:09,080
Well, I think when people start off with
50
00:02:09,080 --> 00:02:12,000
either concentrated in one position, like you said,
51
00:02:12,080 --> 00:02:13,980
or just legacy stocks that have been held
52
00:02:13,980 --> 00:02:16,060
over a long period of time since the
53
00:02:16,060 --> 00:02:19,900
90s or whatever, the question is, what do
54
00:02:19,900 --> 00:02:20,380
you do?
55
00:02:20,480 --> 00:02:22,140
How do you manage around that?
56
00:02:22,520 --> 00:02:25,740
And I think that's probably the most conservative
57
00:02:25,740 --> 00:02:26,220
option.
58
00:02:26,400 --> 00:02:29,260
We've been talking about concentrated stock recently.
59
00:02:29,960 --> 00:02:32,700
The most conservative option would be to manage
60
00:02:32,700 --> 00:02:34,500
what you can around those positions.
61
00:02:35,740 --> 00:02:37,700
But I don't want to sell them.
62
00:02:37,780 --> 00:02:38,880
I don't want to pay taxes.
63
00:02:39,280 --> 00:02:40,780
Yeah, that's a great point.
64
00:02:41,060 --> 00:02:43,180
So if I don't want to sell this
65
00:02:43,180 --> 00:02:46,060
position, well, first off, it's important to recognize,
66
00:02:46,140 --> 00:02:48,100
depending on the amount of scale, like how
67
00:02:48,100 --> 00:02:51,060
much we're in a particular position, this can
68
00:02:51,060 --> 00:02:54,100
add a magnitude of risk.
69
00:02:55,060 --> 00:02:58,660
So we generally think in terms of guidance
70
00:02:58,660 --> 00:03:02,000
for people to think around 5% of
71
00:03:02,000 --> 00:03:05,720
your investment portfolio in any one name, you
72
00:03:05,720 --> 00:03:07,780
get beyond that, you're starting to get to
73
00:03:07,780 --> 00:03:09,000
a point where you have more risk.
74
00:03:09,860 --> 00:03:12,060
Even if it's maybe 10%, it might depend
75
00:03:12,060 --> 00:03:14,960
on the stock, the kind of company it
76
00:03:14,960 --> 00:03:18,960
is, but how diversified within the company.
77
00:03:19,160 --> 00:03:22,140
You might have multiple companies, different areas of
78
00:03:22,140 --> 00:03:22,960
business within it.
79
00:03:25,360 --> 00:03:26,300
Berkshire Hathaway.
80
00:03:26,520 --> 00:03:27,660
Berkshire Hathaway is a good example.
81
00:03:27,800 --> 00:03:28,880
Procter & Gamble, something like that.
82
00:03:29,020 --> 00:03:31,160
It's many companies all in one stock.
83
00:03:32,480 --> 00:03:34,740
So that kind of thing, that's a good
84
00:03:34,740 --> 00:03:35,360
example.
85
00:03:36,200 --> 00:03:38,260
But even so, we typically would say if
86
00:03:38,260 --> 00:03:41,360
it's getting beyond that 5% range, we're
87
00:03:41,360 --> 00:03:44,660
getting extra magnitude of risk built into the
88
00:03:44,660 --> 00:03:45,140
portfolio.
89
00:03:45,460 --> 00:03:46,980
And so that's where we start to get
90
00:03:46,980 --> 00:03:47,260
nervous.
91
00:03:47,640 --> 00:03:51,060
So the one way we can try to
92
00:03:51,060 --> 00:03:52,700
manage the risk is by looking at the
93
00:03:52,700 --> 00:03:53,440
asset allocation.
94
00:03:53,640 --> 00:03:54,960
What's our overall allocation?
95
00:03:55,780 --> 00:03:58,680
And if we can, maybe there's places that
96
00:03:58,680 --> 00:04:03,440
we can reduce our overall exposure to risk,
97
00:04:03,600 --> 00:04:05,440
volatility, stock in this case.
98
00:04:06,460 --> 00:04:10,300
So we have had occasion where we talked
99
00:04:10,300 --> 00:04:11,700
about asset location.
100
00:04:13,600 --> 00:04:16,200
If we make those changes in our taxable
101
00:04:16,200 --> 00:04:19,300
accounts, well, there might be some tax consequences.
102
00:04:19,700 --> 00:04:22,760
But if we have non-taxable accounts or
103
00:04:22,760 --> 00:04:29,100
tax deferred, let's say, IRAs, 401ks, certainly Roth
104
00:04:29,100 --> 00:04:31,500
IRA too, but we tend to like to
105
00:04:31,500 --> 00:04:33,700
keep that for growth if we can.
106
00:04:34,560 --> 00:04:36,680
But these might be places where we could
107
00:04:36,680 --> 00:04:38,600
make a change, or if you had annuity
108
00:04:38,600 --> 00:04:39,220
assets.
109
00:04:40,180 --> 00:04:42,580
These might be places where you could rearrange
110
00:04:42,580 --> 00:04:45,420
the allocation of what kind of investments you
111
00:04:45,420 --> 00:04:47,600
own without a tax consequence.
112
00:04:48,840 --> 00:04:50,600
And you might be able to scale up
113
00:04:50,600 --> 00:04:56,060
the lower risk investments as a starting point
114
00:04:56,060 --> 00:04:58,240
without any tax consequence.
115
00:04:59,260 --> 00:05:00,680
So that's maybe step one.
116
00:05:00,760 --> 00:05:01,540
That's what you're driving at?
117
00:05:01,680 --> 00:05:02,500
Yeah, exactly.
118
00:05:02,660 --> 00:05:04,080
To take a look at everything else.
119
00:05:04,900 --> 00:05:08,280
And if you're, for whatever reason, locked into
120
00:05:08,280 --> 00:05:09,560
that position, either you have a lot of
121
00:05:09,560 --> 00:05:13,740
conviction, you're extremely attached to that position because
122
00:05:13,740 --> 00:05:14,480
that does happen.
123
00:05:15,240 --> 00:05:16,920
It's not always the best.
124
00:05:17,780 --> 00:05:19,640
That's probably not what we would prefer to
125
00:05:19,640 --> 00:05:23,780
have a sentimental attachment to specific positions, but
126
00:05:23,780 --> 00:05:24,480
it does happen.
127
00:05:25,160 --> 00:05:29,460
And I think another piece is, yes, on
128
00:05:29,460 --> 00:05:32,320
the asset allocation side to try to reduce
129
00:05:32,320 --> 00:05:34,580
risk in other areas, but also reducing risk
130
00:05:34,580 --> 00:05:36,220
away from that specific sector.
131
00:05:36,920 --> 00:05:39,540
So if it's a tech stock that this
132
00:05:39,540 --> 00:05:42,620
individual might have or whatever it may be,
133
00:05:42,820 --> 00:05:44,200
you can- Well, we have an example
134
00:05:44,200 --> 00:05:48,360
of an older gentleman who has telecom stocks.
135
00:05:48,640 --> 00:05:53,640
They've had- Acquired them through a ESOP,
136
00:05:53,960 --> 00:05:54,660
an employee.
137
00:05:55,300 --> 00:05:57,420
Or inherited or whatever.
138
00:05:57,660 --> 00:05:59,180
Either way, they got them.
139
00:05:59,520 --> 00:06:01,680
I was talking with a client recently where
140
00:06:02,620 --> 00:06:07,080
they went through the breakup and now come
141
00:06:07,080 --> 00:06:08,040
back together.
142
00:06:08,400 --> 00:06:11,680
They've been round trip on their telecom stocks.
143
00:06:12,340 --> 00:06:15,760
So the basis on these is nil.
144
00:06:17,300 --> 00:06:20,140
And on the one hand, you'd say, well,
145
00:06:20,140 --> 00:06:23,180
maybe I'd rather just hold onto it until
146
00:06:23,180 --> 00:06:25,340
I pass away because there's a step up
147
00:06:25,340 --> 00:06:28,160
in basis for my heirs.
148
00:06:29,560 --> 00:06:33,520
But there's also this, we're missing out on
149
00:06:33,520 --> 00:06:37,260
opportunity because the performance of these stocks isn't
150
00:06:37,260 --> 00:06:37,820
as good.
151
00:06:38,420 --> 00:06:41,280
The dividend is nice, but the overall performance
152
00:06:41,280 --> 00:06:42,940
has been subpar.
153
00:06:45,440 --> 00:06:48,700
So maybe how old I am is part
154
00:06:48,700 --> 00:06:49,820
of this equation, right?
155
00:06:50,460 --> 00:06:53,180
We have a case where we're dealing with
156
00:06:53,180 --> 00:06:57,140
a family who has the owner is in
157
00:06:57,140 --> 00:07:01,420
his 90s, I want to say, and some
158
00:07:01,420 --> 00:07:02,520
legacy stocks.
159
00:07:03,180 --> 00:07:05,580
Well, I get why.
160
00:07:05,800 --> 00:07:07,220
So how do we, in that case, maybe
161
00:07:07,220 --> 00:07:09,500
it's more about how do we mitigate risk?
162
00:07:11,300 --> 00:07:13,900
In some cases, it might be, where can
163
00:07:13,900 --> 00:07:15,540
we make some changes?
164
00:07:15,760 --> 00:07:17,040
There might be some low hanging fruit.
165
00:07:17,240 --> 00:07:20,240
Some of these stocks may actually be worth
166
00:07:20,240 --> 00:07:23,500
less than what they have as basis.
167
00:07:24,340 --> 00:07:26,960
And there can be opportunities to do some
168
00:07:26,960 --> 00:07:29,700
offsetting of capital gains with capital losses.
169
00:07:32,340 --> 00:07:34,560
But for example, if you owned, just as
170
00:07:34,560 --> 00:07:37,640
an example, if you own GE in the
171
00:07:37,640 --> 00:07:43,160
90s or the early 2000s, and it's seen
172
00:07:43,160 --> 00:07:46,240
drastic changes in the way GE is structured
173
00:07:46,240 --> 00:07:49,380
and priced and so forth, you might actually
174
00:07:49,380 --> 00:07:51,620
have a capital loss in your mix to
175
00:07:51,620 --> 00:07:52,260
draw from.
176
00:07:53,280 --> 00:07:55,820
And that could work against something else that
177
00:07:55,820 --> 00:07:57,880
you have as a big long-term capital
178
00:07:57,880 --> 00:08:00,360
gain, as an example.
179
00:08:01,680 --> 00:08:04,660
So in any case, but if we've got
180
00:08:04,660 --> 00:08:08,680
instances where we might have something we would
181
00:08:08,680 --> 00:08:12,280
like to try to hold on to because
182
00:08:12,280 --> 00:08:14,200
we'd rather have the step up in basis,
183
00:08:15,040 --> 00:08:17,480
what's a way we might be able to
184
00:08:17,480 --> 00:08:19,280
navigate the risks?
185
00:08:20,220 --> 00:08:23,800
Perhaps an option strategy could be a consideration.
186
00:08:23,800 --> 00:08:25,380
You want to talk about that, Russ?
187
00:08:26,220 --> 00:08:26,420
Yeah.
188
00:08:26,620 --> 00:08:31,159
So especially if you have one stock or
189
00:08:31,159 --> 00:08:33,100
a concentrated group of stocks, but really it
190
00:08:33,100 --> 00:08:34,780
works best, I think, if we're talking about
191
00:08:34,780 --> 00:08:35,320
one specific stock.
192
00:08:35,320 --> 00:08:37,539
A single position that's concentrated.
193
00:08:37,860 --> 00:08:37,960
Yep.
194
00:08:38,559 --> 00:08:41,280
If you say, this stock has done really
195
00:08:41,280 --> 00:08:44,760
well, I'm worried about how it's going to
196
00:08:44,760 --> 00:08:48,200
affect my overall portfolio if that stock plummets
197
00:08:48,200 --> 00:08:48,640
tomorrow.
198
00:08:49,160 --> 00:08:51,900
Because I've got such a large concentration in
199
00:08:51,900 --> 00:08:53,060
this one company.
200
00:08:53,980 --> 00:08:54,080
Yeah.
201
00:08:54,740 --> 00:08:55,680
So yeah.
202
00:08:56,000 --> 00:08:56,620
Go ahead.
203
00:08:56,860 --> 00:08:57,000
Yeah.
204
00:08:57,180 --> 00:09:00,840
Just that there are ways we can use
205
00:09:00,840 --> 00:09:03,980
an option strategy to hedge against that downside
206
00:09:03,980 --> 00:09:04,240
risk.
207
00:09:04,340 --> 00:09:08,600
So you'd basically be buying a put and
208
00:09:08,600 --> 00:09:09,760
I'll let you...
209
00:09:09,760 --> 00:09:09,960
Yeah.
210
00:09:10,020 --> 00:09:11,780
So I'll take on this.
211
00:09:12,300 --> 00:09:13,420
So I think we don't need to get
212
00:09:13,420 --> 00:09:15,100
too into the weeds on this.
213
00:09:15,620 --> 00:09:17,900
I think most people would say, options?
214
00:09:18,240 --> 00:09:20,120
I don't want to have risk.
215
00:09:20,420 --> 00:09:21,960
I'm trying to reduce my risk.
216
00:09:22,160 --> 00:09:25,320
And options sounds like, because of what we
217
00:09:25,320 --> 00:09:28,860
hear from people, oftentimes options are used for
218
00:09:28,860 --> 00:09:32,540
leverage to give me enhanced risk, but to
219
00:09:32,540 --> 00:09:35,420
try to get more juice in a portfolio.
220
00:09:35,900 --> 00:09:37,240
That's not what we're talking about here.
221
00:09:37,780 --> 00:09:39,700
Well, one of the ways options can be
222
00:09:39,700 --> 00:09:42,080
used is to mitigate downside risk.
223
00:09:42,200 --> 00:09:43,620
Think like an insurance policy.
224
00:09:44,140 --> 00:09:46,760
I can pay a premium, buy an insurance
225
00:09:46,760 --> 00:09:49,600
policy to mitigate my downside.
226
00:09:50,240 --> 00:09:52,540
And essentially, I might still have some downside,
227
00:09:52,740 --> 00:09:53,900
but I might be able to say, I
228
00:09:53,900 --> 00:09:56,520
want to put a floor on that downside.
229
00:09:56,800 --> 00:10:00,160
And usually when we do these approaches, so
230
00:10:00,160 --> 00:10:02,360
we're buying, we're paying a premium for that
231
00:10:02,360 --> 00:10:05,340
to protect that downside, but we might also
232
00:10:05,340 --> 00:10:10,340
sell an option to cap our upside so
233
00:10:10,340 --> 00:10:12,520
that it will help to pay for this
234
00:10:12,520 --> 00:10:13,060
insurance.
235
00:10:14,220 --> 00:10:16,640
And when we use a team that does
236
00:10:16,640 --> 00:10:20,960
this exclusively, oftentimes they can manage this in
237
00:10:20,960 --> 00:10:23,080
a way where we can try to avoid
238
00:10:23,080 --> 00:10:25,800
having an actual transaction occur.
239
00:10:26,820 --> 00:10:28,980
They can get rid of the contracts, roll
240
00:10:28,980 --> 00:10:35,120
the contracts and just keep moving the expiration
241
00:10:35,120 --> 00:10:38,900
date further down the line to avoid any
242
00:10:38,900 --> 00:10:42,860
kind of experience where we have to sell
243
00:10:42,860 --> 00:10:45,720
the security that we really don't want to
244
00:10:45,720 --> 00:10:46,880
sell for a tax purpose.
245
00:10:47,640 --> 00:10:52,380
So that's one possible way is this involved,
246
00:10:53,060 --> 00:10:58,320
but sophisticated way of mitigating risk through the
247
00:10:58,320 --> 00:11:01,100
use of options as a way to limit
248
00:11:01,100 --> 00:11:02,880
downside exposure.
249
00:11:03,700 --> 00:11:06,480
And it's important to recognize when you buy
250
00:11:06,480 --> 00:11:09,780
insurance, there's usually a premium involved.
251
00:11:09,920 --> 00:11:13,420
So there is some cost oftentimes when you're
252
00:11:13,420 --> 00:11:14,120
doing this.
253
00:11:14,740 --> 00:11:17,020
You can mitigate some of that cost and
254
00:11:17,020 --> 00:11:20,460
make it more manageable and not so painful
255
00:11:20,460 --> 00:11:21,280
in the process.
256
00:11:21,440 --> 00:11:25,580
But I think we probably overlooked the first
257
00:11:25,580 --> 00:11:28,360
and most obvious choice of when you have
258
00:11:28,360 --> 00:11:29,080
this issue.
259
00:11:30,220 --> 00:11:33,400
If you've got concentrated stock, you don't really
260
00:11:33,400 --> 00:11:34,400
want to pay the tax.
261
00:11:35,640 --> 00:11:39,280
But in some cases, we've had clients and
262
00:11:39,280 --> 00:11:45,660
friends who've had a concentrated position, had a
263
00:11:45,660 --> 00:11:48,820
huge run up, felt great, made a lot
264
00:11:48,820 --> 00:11:51,960
of money, but I don't want to pay
265
00:11:51,960 --> 00:11:52,540
that tax.
266
00:11:53,960 --> 00:11:55,680
And they chose not to.
267
00:11:56,480 --> 00:12:00,100
Well, and the good news is the stock
268
00:12:00,100 --> 00:12:01,840
has changed in price and they don't have
269
00:12:01,840 --> 00:12:06,520
a capital gains tax anymore, but that's not
270
00:12:06,520 --> 00:12:07,380
always the good news.
271
00:12:07,500 --> 00:12:10,280
That's bad news too, that the price has
272
00:12:10,280 --> 00:12:10,560
changed.
273
00:12:11,020 --> 00:12:15,220
So sometimes it's worth biting the bullet, just
274
00:12:15,220 --> 00:12:17,860
recognizing you don't own all the value of
275
00:12:17,860 --> 00:12:18,400
that stock.
276
00:12:18,520 --> 00:12:20,380
Uncle Sam's got a claim on some of
277
00:12:20,380 --> 00:12:20,740
the gain.
278
00:12:21,300 --> 00:12:26,200
And so many people put the primary decision
279
00:12:26,200 --> 00:12:29,980
as the tax consequence of whether or not
280
00:12:29,980 --> 00:12:31,480
to sell an investment.
281
00:12:31,620 --> 00:12:35,900
And that's a factor, but it's really not
282
00:12:35,900 --> 00:12:37,020
the most important factor.
283
00:12:37,020 --> 00:12:39,820
The most important factor from my perspective is
284
00:12:39,820 --> 00:12:42,140
what's the outlook for the stock?
285
00:12:43,440 --> 00:12:45,480
Is it in a growing industry?
286
00:12:45,760 --> 00:12:47,380
Are their earnings good?
287
00:12:47,440 --> 00:12:49,080
Is the company being managed right?
288
00:12:49,080 --> 00:12:50,460
Is it in the right sector?
289
00:12:50,840 --> 00:12:52,320
Where are we in the business cycle?
290
00:12:52,340 --> 00:12:54,720
All these things that Brian and you do,
291
00:12:55,080 --> 00:12:57,820
Chris, when you're analyzing a stock, either fundamentally
292
00:12:57,820 --> 00:13:01,280
or technically, but that should be question one.
293
00:13:01,460 --> 00:13:02,680
I own this stock.
294
00:13:03,100 --> 00:13:04,720
Is the future of the stock positive?
295
00:13:06,000 --> 00:13:08,880
That's a whole different analysis than holding some
296
00:13:08,880 --> 00:13:13,100
old industrial company because you've got a large
297
00:13:13,100 --> 00:13:15,540
capital gain that's in a business that is
298
00:13:15,540 --> 00:13:16,960
questionable for the future.
299
00:13:17,680 --> 00:13:19,820
We had a conversation with someone who thinks
300
00:13:19,820 --> 00:13:21,280
the company is great that they have a
301
00:13:21,280 --> 00:13:23,680
concentrated position in, but they think it's kind
302
00:13:23,680 --> 00:13:25,040
of had a good run and maybe it's
303
00:13:25,040 --> 00:13:26,360
a little overpriced right now.
304
00:13:26,740 --> 00:13:30,180
What if you're someone else who says, well,
305
00:13:30,320 --> 00:13:31,900
it's not the stock I don't like.
306
00:13:32,100 --> 00:13:34,820
I think we're poised for a downturn with
307
00:13:34,820 --> 00:13:36,680
the markets or the economy.
308
00:13:36,940 --> 00:13:39,580
We're in a position where the outlook isn't
309
00:13:39,580 --> 00:13:40,200
as good.
310
00:13:40,460 --> 00:13:41,520
Or even the sector, right?
311
00:13:41,800 --> 00:13:42,780
Or the sector, right?
312
00:13:42,840 --> 00:13:45,620
So those are all variables that make it
313
00:13:45,620 --> 00:13:47,040
more difficult to navigate.
314
00:13:48,100 --> 00:13:49,960
On the one hand, I want to say,
315
00:13:50,060 --> 00:13:53,020
one of the options is you could sell.
316
00:13:55,420 --> 00:13:56,320
It's painful.
317
00:13:56,600 --> 00:14:02,240
Nobody likes taxes, but on some level, historically,
318
00:14:02,620 --> 00:14:05,420
taxes are relatively inexpensive today.
319
00:14:05,900 --> 00:14:07,120
That's a good point too, right?
320
00:14:07,180 --> 00:14:09,620
It may not be a bad thing to
321
00:14:09,620 --> 00:14:10,100
consider.
322
00:14:10,380 --> 00:14:10,500
All right.
323
00:14:10,600 --> 00:14:11,400
So that's one option.
324
00:14:11,440 --> 00:14:13,600
And not an all or nothing proposition too.
325
00:14:13,600 --> 00:14:14,340
Absolutely right.
326
00:14:14,560 --> 00:14:14,700
All right.
327
00:14:14,860 --> 00:14:16,200
So that's one option.
328
00:14:16,300 --> 00:14:19,040
We have a gentleman who has capital gains
329
00:14:19,040 --> 00:14:21,420
from real estate that they're dealing with.
330
00:14:22,300 --> 00:14:24,400
And we're trying to navigate that.
331
00:14:24,560 --> 00:14:27,600
Let's talk about the idea of how do
332
00:14:27,600 --> 00:14:33,660
we try to manage capital gains through the
333
00:14:33,660 --> 00:14:36,820
try to create a mechanism where we can
334
00:14:36,820 --> 00:14:41,200
generate intentionally, generate capital losses.
335
00:14:42,640 --> 00:14:44,360
So this is another possibility.
336
00:14:44,540 --> 00:14:45,800
You want to start and I'll jump in?
337
00:14:45,980 --> 00:14:46,080
Yeah.
338
00:14:46,080 --> 00:14:48,060
Well, I think it's important to remember that
339
00:14:48,060 --> 00:14:51,580
capital gains and losses are not just in
340
00:14:51,580 --> 00:14:53,220
your stock portfolio.
341
00:14:53,560 --> 00:14:55,620
They're also, like you said, if you're selling
342
00:14:55,620 --> 00:14:57,800
a business, if you're selling a home, capital
343
00:14:57,800 --> 00:15:00,740
gains- Like a rental property or like
344
00:15:00,740 --> 00:15:02,620
an investment property type of- Yeah.
345
00:15:02,740 --> 00:15:03,560
I mean, or your own property.
346
00:15:03,560 --> 00:15:03,660
Yeah.
347
00:15:03,780 --> 00:15:05,380
I guess it's after a certain amount of
348
00:15:05,380 --> 00:15:05,680
gain.
349
00:15:05,940 --> 00:15:06,100
Right.
350
00:15:06,180 --> 00:15:07,280
Depending on the value, right?
351
00:15:07,440 --> 00:15:07,660
Yeah.
352
00:15:08,360 --> 00:15:11,500
So those gains, they're still capital gains when
353
00:15:11,500 --> 00:15:13,060
you sell a house and they could be
354
00:15:13,060 --> 00:15:16,540
offset by losses in your stock portfolio because
355
00:15:16,540 --> 00:15:17,720
those are capital losses.
356
00:15:18,720 --> 00:15:24,100
So one option is, it can get a
357
00:15:24,100 --> 00:15:25,880
little bit into the weeds to go into
358
00:15:25,880 --> 00:15:28,900
the details, but it's based on a direct
359
00:15:28,900 --> 00:15:30,700
indexing sort of approach.
360
00:15:31,160 --> 00:15:34,680
And direct indexing basically is you look at
361
00:15:34,680 --> 00:15:37,220
a portfolio like the S&P 500 and
362
00:15:37,220 --> 00:15:39,860
rather than buying a mutual fund or ETF
363
00:15:39,860 --> 00:15:43,380
that contains all of it in one security,
364
00:15:44,020 --> 00:15:45,160
you're saying, I'm going to break that up.
365
00:15:45,280 --> 00:15:47,600
I'm going to buy a number, a hundreds
366
00:15:47,600 --> 00:15:50,100
sometimes of those stocks in the portfolio.
367
00:15:50,440 --> 00:15:50,940
Yeah.
368
00:15:50,940 --> 00:15:52,700
So it moves in a way that's similar
369
00:15:52,700 --> 00:15:53,700
to that index.
370
00:15:54,840 --> 00:15:57,400
But in the midst of that, with all
371
00:15:57,400 --> 00:16:00,960
these individual positions, some of them go down.
372
00:16:01,740 --> 00:16:06,940
And we could replace those positions that went
373
00:16:06,940 --> 00:16:10,880
down with something that's very similar.
374
00:16:11,140 --> 00:16:13,620
So we'll stay invested in a way that
375
00:16:13,620 --> 00:16:16,160
it still continues to look like the index,
376
00:16:16,620 --> 00:16:19,660
but I can capture all these little moves
377
00:16:19,660 --> 00:16:25,780
on the downside to benefit from that capital
378
00:16:25,780 --> 00:16:29,540
loss, that decline in value for a small
379
00:16:29,540 --> 00:16:32,940
piece of the mix and harvest that to
380
00:16:32,940 --> 00:16:35,780
help me manage gains that I have to
381
00:16:35,780 --> 00:16:36,520
deal with elsewhere.
382
00:16:38,200 --> 00:16:41,540
And in some instances, we might even leverage
383
00:16:41,540 --> 00:16:45,440
that where we have a long short strategy
384
00:16:45,440 --> 00:16:48,860
paired with that, where we're going to put
385
00:16:48,860 --> 00:16:53,420
a little bit more exposure on top and
386
00:16:53,420 --> 00:16:56,920
below, where if we're buying long and selling
387
00:16:56,920 --> 00:17:01,440
short, and if the market goes up, well,
388
00:17:01,580 --> 00:17:03,339
one portion of that is going to make
389
00:17:03,339 --> 00:17:05,000
money, but another portion of that is going
390
00:17:05,000 --> 00:17:05,520
to lose money.
391
00:17:05,680 --> 00:17:09,240
The short portion would have losses.
392
00:17:09,920 --> 00:17:13,839
If we see the market go down, well,
393
00:17:14,060 --> 00:17:17,700
the long portion has losses, but the short
394
00:17:17,700 --> 00:17:18,760
portion will have made money.
395
00:17:18,900 --> 00:17:22,060
So we're neutral to what happens in the
396
00:17:22,060 --> 00:17:26,339
market because we've got long and short, but
397
00:17:26,339 --> 00:17:29,120
invariably, some portion of that will give us
398
00:17:29,120 --> 00:17:32,060
an opportunity to harvest losses.
399
00:17:33,300 --> 00:17:36,200
And we can use that in a way
400
00:17:36,200 --> 00:17:43,700
to try to capture some tax benefit now
401
00:17:44,580 --> 00:17:46,760
and use that as a way to help
402
00:17:46,760 --> 00:17:49,200
to offset that gain.
403
00:17:49,280 --> 00:17:50,800
We might be dealing with that real estate,
404
00:17:50,800 --> 00:17:53,180
or in the case of the concentrated position,
405
00:17:53,400 --> 00:17:55,740
we might be able to sell some holdings
406
00:17:55,740 --> 00:17:59,780
to help mitigate that risk, that tax, and
407
00:17:59,780 --> 00:18:02,460
to diversify from the risk that we have
408
00:18:02,460 --> 00:18:03,600
in the concentrated stock.
409
00:18:04,220 --> 00:18:06,500
And one additional benefit is that when you
410
00:18:06,500 --> 00:18:09,900
generate those losses, let's say you get into
411
00:18:09,900 --> 00:18:12,800
one of these strategies and the market starts
412
00:18:12,800 --> 00:18:15,840
going down right away, you start racking up
413
00:18:15,840 --> 00:18:18,700
losses, it's not going to feel great because
414
00:18:18,700 --> 00:18:20,640
you're kind of going along the ride with
415
00:18:20,640 --> 00:18:22,800
the market, but you're also generating losses that
416
00:18:22,800 --> 00:18:25,660
you can carry forward year after year, as
417
00:18:25,660 --> 00:18:27,520
long as you live, really.
418
00:18:27,740 --> 00:18:30,740
Yeah, we have someone who has this kind
419
00:18:30,740 --> 00:18:34,260
of a circumstance with a future sale of
420
00:18:34,260 --> 00:18:35,640
an appreciated asset.
421
00:18:35,880 --> 00:18:38,980
It's not today, but they know they're thinking
422
00:18:38,980 --> 00:18:44,360
of selling this appreciated asset and want to
423
00:18:44,360 --> 00:18:48,440
be prepared for the future gains.
424
00:18:49,020 --> 00:18:51,220
So they're locking in losses to sort of
425
00:18:51,220 --> 00:18:53,760
capture those so that then they just stay.
426
00:18:54,400 --> 00:18:57,840
You get to deduct $3,000 a year,
427
00:18:58,280 --> 00:19:00,260
so they might diminish a little bit over
428
00:19:00,260 --> 00:19:02,920
time, but you've banked those losses so you
429
00:19:02,920 --> 00:19:04,920
can use them against future gains, and it's
430
00:19:04,920 --> 00:19:06,440
another date down the road.
431
00:19:07,300 --> 00:19:10,120
So that can also be, with some forethought,
432
00:19:10,240 --> 00:19:13,280
some time to prepare, you can be better
433
00:19:13,280 --> 00:19:15,820
situated for when you have that.
434
00:19:16,860 --> 00:19:19,080
So it's an unusual thought process.
435
00:19:19,240 --> 00:19:24,340
I think sometimes we talk about capturing losses
436
00:19:24,340 --> 00:19:28,280
and harvesting losses, and people think, why would
437
00:19:28,280 --> 00:19:29,440
you want to have losses?
438
00:19:29,760 --> 00:19:31,900
You don't necessarily want to have losses.
439
00:19:32,100 --> 00:19:37,340
But in this case, we can intentionally set
440
00:19:37,340 --> 00:19:40,380
out to manipulate the structure of things so
441
00:19:40,380 --> 00:19:42,700
that we can gather those losses to help
442
00:19:42,700 --> 00:19:43,880
offset taxes.
443
00:19:44,580 --> 00:19:47,080
And that is another form of return.
444
00:19:47,260 --> 00:19:49,440
It's not what you make, it's what you
445
00:19:49,440 --> 00:19:49,820
keep.
446
00:19:50,540 --> 00:19:53,020
So this helps us to have what they
447
00:19:53,020 --> 00:19:54,000
call tax alpha.
448
00:19:54,400 --> 00:19:57,080
We're going to have some added benefit and
449
00:19:57,080 --> 00:20:02,040
have a better effective outcome because of trying
450
00:20:02,040 --> 00:20:03,760
to mitigate some of that tax burden.
451
00:20:03,840 --> 00:20:05,820
And it may be that we still have
452
00:20:05,820 --> 00:20:08,520
some tax burden down the road, but in
453
00:20:08,520 --> 00:20:11,600
the case of, say, the concentrated position or
454
00:20:11,600 --> 00:20:16,540
the instance of the real estate that we're
455
00:20:16,540 --> 00:20:19,540
trying to avoid a tax on, this gives
456
00:20:19,540 --> 00:20:23,320
us the opportunity to push that problem down
457
00:20:23,320 --> 00:20:24,380
the road a little bit.
458
00:20:24,480 --> 00:20:26,900
And in the case of some of these,
459
00:20:27,000 --> 00:20:29,080
it gives us more opportunity for more diversification,
460
00:20:29,440 --> 00:20:30,240
which may be...
461
00:20:30,240 --> 00:20:31,980
That's what I was going to comment on,
462
00:20:32,080 --> 00:20:34,460
that you're doing that strategy in the context
463
00:20:34,460 --> 00:20:37,740
of a broad-based index situation.
464
00:20:38,220 --> 00:20:41,720
So you're, in essence, have that diversification, not
465
00:20:41,720 --> 00:20:44,080
only by company, but also by sector and
466
00:20:44,080 --> 00:20:45,060
so forth.
467
00:20:45,700 --> 00:20:48,480
So you're not trying to pick winners and
468
00:20:48,480 --> 00:20:48,760
losers.
469
00:20:49,200 --> 00:20:51,300
You're doing it in a context of what
470
00:20:51,300 --> 00:20:52,480
a lot of people like to do is
471
00:20:52,480 --> 00:20:53,360
invest in index.
472
00:20:53,360 --> 00:20:54,040
Yeah.
473
00:20:55,020 --> 00:20:57,100
And there's a certain efficiency there.
474
00:20:57,460 --> 00:20:59,180
But in our case, what we're really just
475
00:20:59,180 --> 00:21:01,080
trying to do is diminish risk.
476
00:21:01,920 --> 00:21:04,520
And that can give us a way to
477
00:21:04,520 --> 00:21:06,180
effectively accomplish that.
478
00:21:07,060 --> 00:21:10,000
So there are other techniques that are even
479
00:21:10,000 --> 00:21:14,560
more involved and sophisticated that maybe go beyond
480
00:21:14,560 --> 00:21:17,260
the scope of a program like this.
481
00:21:17,540 --> 00:21:20,500
But I think it's important to just recognize
482
00:21:20,500 --> 00:21:23,520
that this is a challenge that people...
483
00:21:23,520 --> 00:21:27,520
It's not unique to have this difficulty of
484
00:21:27,520 --> 00:21:33,820
either a long-held stock position, even if
485
00:21:33,820 --> 00:21:37,520
it's inherited, maybe inherited from a parent or
486
00:21:37,520 --> 00:21:37,820
something.
487
00:21:38,140 --> 00:21:39,140
And this is very common.
488
00:21:39,260 --> 00:21:41,500
People have stuff, they just hold onto it
489
00:21:41,500 --> 00:21:42,340
and never change it.
490
00:21:43,060 --> 00:21:45,600
And then now, 20 years later or whatever
491
00:21:45,600 --> 00:21:49,180
it might be, you're faced with, oh, maybe
492
00:21:49,180 --> 00:21:51,720
I should think about my investments in a
493
00:21:51,720 --> 00:21:54,280
strategy that's appropriate for me.
494
00:21:54,960 --> 00:21:56,080
What should I do?
495
00:21:56,500 --> 00:22:00,260
And there's all this embedded tax concern.
496
00:22:01,420 --> 00:22:03,100
So that's not unusual.
497
00:22:03,500 --> 00:22:06,700
It's not unusual for people to have stock
498
00:22:06,700 --> 00:22:11,260
maybe from an employer, maybe to have real
499
00:22:11,260 --> 00:22:15,280
estate that's appreciated, a business that's appreciated.
500
00:22:16,240 --> 00:22:18,560
And having the reality that we've got a
501
00:22:18,560 --> 00:22:20,800
gain that we're going to be faced with,
502
00:22:21,040 --> 00:22:25,440
how do we manage that gain and try
503
00:22:25,440 --> 00:22:29,300
to offset some of that gain through the
504
00:22:29,300 --> 00:22:31,440
use of a technique like this to help
505
00:22:31,440 --> 00:22:37,900
diminish capital gains exposure by capturing losses along
506
00:22:37,900 --> 00:22:41,180
the way or by mitigating the risk through
507
00:22:41,180 --> 00:22:43,320
the use of options as a way to
508
00:22:43,320 --> 00:22:44,720
navigate that.
509
00:22:46,300 --> 00:22:49,060
Or just looking at your overall portfolio and
510
00:22:49,060 --> 00:22:50,880
looking at where there are places where we
511
00:22:50,880 --> 00:22:53,540
can do some changes without some tax burden
512
00:22:53,540 --> 00:22:55,800
to help manage risk.
513
00:22:56,460 --> 00:22:57,900
There's a variety of things to look at.
514
00:22:58,160 --> 00:22:59,640
It's best done in the context of a
515
00:22:59,640 --> 00:23:00,200
financial plan.
516
00:23:00,640 --> 00:23:01,120
Is that where you're going?
517
00:23:01,300 --> 00:23:01,400
Absolutely.
518
00:23:01,460 --> 00:23:03,040
No, I was just going to say that
519
00:23:03,040 --> 00:23:06,200
it's also not like you have to choose
520
00:23:06,200 --> 00:23:08,560
one solution and go with that.
521
00:23:09,260 --> 00:23:10,860
We try to take a look at it
522
00:23:10,860 --> 00:23:13,760
all within that financial plan context as well.
523
00:23:14,180 --> 00:23:15,920
But we look at the whole picture and
524
00:23:15,920 --> 00:23:17,580
we decide, all right, here's what we're going
525
00:23:17,580 --> 00:23:18,420
to do with this piece.
526
00:23:18,520 --> 00:23:19,820
Here's what we would do with this piece.
527
00:23:20,720 --> 00:23:24,640
And maybe some hedging, some tax loss harvesting,
528
00:23:25,220 --> 00:23:27,580
rather than it all being in one specific
529
00:23:27,580 --> 00:23:28,620
strategy.
530
00:23:29,000 --> 00:23:30,580
I remember a couple of clients we've worked
531
00:23:30,580 --> 00:23:34,360
with years past where we had this issue,
532
00:23:34,780 --> 00:23:38,560
appreciated assets, but we also had the desire
533
00:23:38,560 --> 00:23:41,520
for income over a lifetime.
534
00:23:43,200 --> 00:23:48,500
And in some instances, some charitable intentions.
535
00:23:49,200 --> 00:23:54,900
Sometimes people prioritize charitable intent and other times
536
00:23:54,900 --> 00:23:58,400
people just prioritize mitigating, avoiding capital gains.
537
00:23:59,140 --> 00:24:02,820
We talk about a charitable remainder trust, also
538
00:24:02,820 --> 00:24:05,420
known as a capital gains avoidance trust.
539
00:24:06,100 --> 00:24:08,740
It's really more of a, it's not avoidance,
540
00:24:08,920 --> 00:24:12,620
but you're not getting hit with it all
541
00:24:12,620 --> 00:24:13,020
at once.
542
00:24:13,220 --> 00:24:15,000
It's a graduate, you can push it off.
543
00:24:15,920 --> 00:24:19,060
But the idea of taking some position that's
544
00:24:19,060 --> 00:24:22,600
concentrated with a lot of capital gains in
545
00:24:22,600 --> 00:24:25,340
it, we've done this a number of times
546
00:24:25,340 --> 00:24:32,500
where people have donated that stock to this
547
00:24:32,500 --> 00:24:38,480
charitable intention eventually, but get a charitable deduction
548
00:24:38,480 --> 00:24:39,300
right up front.
549
00:24:39,460 --> 00:24:42,860
So some immediate tax benefit and the ability
550
00:24:42,860 --> 00:24:44,820
to then derive income.
551
00:24:44,980 --> 00:24:47,360
We can reposition in the trust that stock
552
00:24:47,360 --> 00:24:50,660
into something that's more diversified and more balanced
553
00:24:50,660 --> 00:24:53,460
and structure it where they can generate a
554
00:24:53,460 --> 00:24:58,960
cashflow from this for themselves, for themselves and
555
00:24:58,960 --> 00:24:59,420
a spouse.
556
00:24:59,560 --> 00:25:01,200
We have one woman who did it with
557
00:25:01,200 --> 00:25:04,020
herself, her spouse, and her sibling.
558
00:25:04,760 --> 00:25:06,300
So as long as any one of them
559
00:25:06,300 --> 00:25:09,940
is alive and their assets remain in the
560
00:25:09,940 --> 00:25:13,540
trust that there's still presumably going to outlive
561
00:25:13,540 --> 00:25:18,880
them all, there's income stream provided to them.
562
00:25:19,380 --> 00:25:21,700
And there's different ways to structure a charitable
563
00:25:21,700 --> 00:25:22,760
remainder trust.
564
00:25:22,940 --> 00:25:25,700
One that's geared to try to maximize income
565
00:25:25,700 --> 00:25:31,880
to the family, the donors, the beneficiaries, but
566
00:25:31,880 --> 00:25:36,020
there's also some that are more regimented, but
567
00:25:36,020 --> 00:25:38,060
can have more growth so that there's more
568
00:25:38,060 --> 00:25:41,460
for the charitable intentions later on.
569
00:25:41,460 --> 00:25:42,800
So depending on what we're trying to do,
570
00:25:42,880 --> 00:25:44,340
there's ways to structure that.
571
00:25:45,260 --> 00:25:48,580
There are other techniques as well that are
572
00:25:48,580 --> 00:25:49,980
state planning techniques.
573
00:25:50,880 --> 00:25:52,440
I think I mentioned one to you.
574
00:25:52,500 --> 00:25:54,440
I didn't even remember now what it was.
575
00:25:54,520 --> 00:25:56,220
Do you remember what my brother mentioned something
576
00:25:56,220 --> 00:25:58,140
to me just today?
577
00:26:00,100 --> 00:26:01,480
I'll look it up.
578
00:26:03,560 --> 00:26:05,860
And that may be something we want to
579
00:26:05,860 --> 00:26:07,960
look into for people as well in their
580
00:26:07,960 --> 00:26:10,660
estate planning, but a deferred sales trust is
581
00:26:10,660 --> 00:26:12,540
another technique he was talking about.
582
00:26:12,980 --> 00:26:16,120
So the estate planning can provide some interesting
583
00:26:16,120 --> 00:26:19,020
opportunities as well that we can try to
584
00:26:19,020 --> 00:26:21,820
collaborate with all these various ways of trying
585
00:26:21,820 --> 00:26:26,920
to manage how best to handle these appreciated
586
00:26:26,920 --> 00:26:27,580
assets.
587
00:26:27,940 --> 00:26:31,480
And the time horizon involved is certainly relevant.
588
00:26:31,480 --> 00:26:32,900
It might be.
589
00:26:33,200 --> 00:26:35,820
The solution or the mitigation of these taxes
590
00:26:35,820 --> 00:26:37,460
may be a multi-year approach.
591
00:26:38,100 --> 00:26:39,760
Yeah, yeah, exactly.
592
00:26:39,980 --> 00:26:40,480
Good point.
593
00:26:41,180 --> 00:26:45,040
And so let's just kind of wind it
594
00:26:45,040 --> 00:26:47,860
down to say that this is all best
595
00:26:47,860 --> 00:26:50,180
done in the context of a financial plan.
596
00:26:50,320 --> 00:26:52,580
So we know how all the pieces fit
597
00:26:52,580 --> 00:26:53,060
together.
598
00:26:53,660 --> 00:26:58,300
We can think about estate planning considerations and
599
00:26:58,300 --> 00:27:00,240
charitable giving considerations.
600
00:27:00,860 --> 00:27:03,080
Think about some of these techniques we've just
601
00:27:03,080 --> 00:27:06,220
elaborated on and the context of the portfolio,
602
00:27:06,400 --> 00:27:08,300
how the rest of all those pieces fit
603
00:27:08,300 --> 00:27:08,700
together.
604
00:27:09,000 --> 00:27:10,980
If you're faced with some of these kinds
605
00:27:10,980 --> 00:27:13,240
of issues, you're not alone.
606
00:27:13,560 --> 00:27:16,040
There's lots of people who have similar kind
607
00:27:16,040 --> 00:27:18,340
of challenges and a little bit of planning
608
00:27:18,340 --> 00:27:21,100
can go a long way and helping you
609
00:27:21,100 --> 00:27:23,020
to navigate that tax cost.
610
00:27:23,460 --> 00:27:25,060
Russ and I were just talking last night
611
00:27:25,060 --> 00:27:28,940
and saying, it seems like tax priorities, tax
612
00:27:28,940 --> 00:27:32,460
issues, it's more on people's minds today than
613
00:27:32,460 --> 00:27:33,180
ever before.
614
00:27:33,400 --> 00:27:38,900
How do I navigate and manage my expenses
615
00:27:38,900 --> 00:27:41,700
when it comes to tax costs as part
616
00:27:41,700 --> 00:27:43,180
of my investment strategies?
617
00:27:44,240 --> 00:27:48,280
It's probably more than ever on people's minds.
618
00:27:48,280 --> 00:27:51,660
There are some great resources and techniques.
619
00:27:52,440 --> 00:27:55,000
And if you need help navigating how that
620
00:27:55,000 --> 00:27:57,820
works for you, give us a call, reach
621
00:27:57,820 --> 00:27:58,080
out.
622
00:27:58,240 --> 00:28:00,060
Don't hesitate to try to see if we
623
00:28:00,060 --> 00:28:01,980
can be a resource in helping you figure
624
00:28:01,980 --> 00:28:05,380
out what's the best path forward, not only
625
00:28:05,380 --> 00:28:08,400
for your portfolio, but for your overall life
626
00:28:08,400 --> 00:28:10,520
circumstances for your financial plan.
627
00:28:10,780 --> 00:28:13,660
So with that, thanks for being with us.
628
00:28:13,980 --> 00:28:15,440
And if any way we can be of
629
00:28:15,440 --> 00:28:16,340
help, reach out.
630
00:28:16,540 --> 00:28:18,920
Until next time, keep striving for something more.
631
00:28:45,800 --> 00:28:48,780
AMR-info at wealthenhancement.com.
632
00:28:49,160 --> 00:28:50,900
You're listening to something more with Chris Boyd
633
00:28:50,900 --> 00:28:51,740
Financial Talk Show.
634
00:28:51,900 --> 00:28:54,340
Wealth Enhancement Advisory Services and Jay Christopher Boyd
635
00:28:54,340 --> 00:28:56,660
provide investment advice on an individual basis to
636
00:28:56,660 --> 00:28:57,220
clients only.
637
00:28:57,360 --> 00:28:59,360
Proper advice depends on a complete analysis of
638
00:28:59,360 --> 00:29:00,520
all facts and circumstances.
639
00:29:00,780 --> 00:29:02,640
The information given on this program is general
640
00:29:02,640 --> 00:29:04,680
financial comments and cannot be relied upon as
641
00:29:04,680 --> 00:29:06,240
pertaining to your specific situation.
642
00:29:06,440 --> 00:29:08,420
Wealth Enhancement Group cannot guarantee that using the
643
00:29:08,420 --> 00:29:10,440
information from this show will generate profits or
644
00:29:10,440 --> 00:29:11,600
ensure freedom from loss.
645
00:29:11,740 --> 00:29:13,900
Listeners should consult their own financial advisors or
646
00:29:13,900 --> 00:29:16,020
conduct their own due diligence before making any
647
00:29:16,020 --> 00:29:16,780
financial decisions.
