​Emotional investing is nothing new to the markets. In recent history, we have seen it work in our favor as promises of growth propelled our future. However, when investors are warned that momentary pain is on the horizon or are already experiencing it—a primal sense of survival takes over. How do we evaluate this and recognize when to preserve and when to pivot?

Evaluating where you are in your plan is the first step in assessing your next move. Just as you would not continue your strategy in chess after a counter-move without reading the board, it’s important to reassess your position. In some cases, that might mean stepping back to position yourself for a stronger defense. This pivot can involve sectors, bonds, or equities that you may not have previously considered. As you evaluate, you will need to establish a time horizon for performance and set expectations for pivoting again. This method will keep you vigilant and foster a sense of control.

Preserving your future contributions to avoid undue market volatility is not always the favored approach, but when all asset classes decline, cash can be the best place to hold until markets reach all-time lows. When evaluating an entry strategy from a preservation or cash position, the metrics differ from those used when dollar-cost averaging into the market. You will need to determine which positions have the most upward trajectory or resilience in similar conditions. This approach allows for faster growth, as accumulation occurs without needing to recover from market turmoil. However, it is important to note that past performance is not an indicator of future growth.

Those nearing retirement have likely already discussed with me how to structure a plan that allows for market corrections without affecting their income. For those with a longer time horizon, stockpiling and investing now may present an opportunity, as this could be the lowest market level seen for some time. If you know someone who is struggling to feel confident in their plan, refer them to me so they can experience the same peace of mind that comes from the strategies we set up earlier in the year.

Are you preparing your taxes and preliminarily seeing that you owe this year? While that can be frustrating, there is still time to reduce your taxes if you qualify. The main ways are through contributions and losses—contributions to a traditional IRA or HSA and realizing losses from a brokerage account. Contributions need to be made by April 15th, and losses have closed out in past years but can roll over.

Traditional IRA
For 2024, the maximum IRA contribution is:

• $7,000 for those under 50
• $8,000 for those 50 or older

This can be directly deducted from your income. However, certain exceptions may limit the full deduction, such as if you or your spouse have a 401(k) through work or if your income exceeds certain thresholds. At a glance, here is whether it’s possible to contribute to get that deduction.

HSA Contribution
Contributing to a "prior year" HSA is another option for people who have a high-deductible healthcare plan (HDHP). Those plans have access to an HSA, and contributions can be tax-deductible. If you are unsure whether you have the right type of plan, ask your benefits specialist.

• $4,150 for an individual plan
• $8,300 for a family plan
• Additional $1,000 for those over age 55

If both spouses have a family HSA, their max contribution can be $8,300 combined. Lastly, if your employer contributes to these plans, their contributions will count toward your total contribution.
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Capital Losses
You can deduct up to $3,000 from your ordinary income if you sold positions in your brokerage accounts in the previous year. These losses can roll over from year to year. Be sure to keep records of these transactions and consult a tax professional for personalized guidance.

​If you have talked to your tax preparer and are ready to fund an account, we are here to help. With an array of investment options and guidance tailored to your financial goals and risk tolerance, we will ensure your account fits into your broader financial plan.

Reference
1. Publication 590-A (2024), Contributions to Individual Retirement Arrangements (IRAs)