– Or –
An Internal Revenue Service (IRS) regulation that prohibits taxpayers from taking a tax deduction for the loss on the sale of a security that they replace with the same security within 30 days.
#washsale #IRS #security #regulation
Since October 22, 2022, the capital markets in general have trended upward.
Year-to-date US Small Caps are up 8.5%, the Nasdaq is up over 11% and even economically challenged international markets are positive 8.5%.
Furthermore, “growth stocks” have temporarily taken over leadership from “value stocks” across all capitalizations (large, mid and small). Should this latest rally lead us to think that we have entered a new phase in this market?
Perhaps.
While encouraged, BaldwinClarke recognizes further challenges remain in 2023. In other words, we may not be out of the woods yet.
Identifying a true market bottom and the transition between bear to bull markets is never easy. These transitions generally come in fits and starts. Last year for example we experienced 7 different bear market rallies - rallies where the market went up (on average) 9% only to trend back lower.
What is apparent now is that there will be no traditional “V” shape recovery this time around.
Liquidity refers to the ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread.
If there is a large difference between the prices buyers are bidding, and the prices sellers are asking, there may not be the opportunity for a quick sale.
There is always a ready market for U.S. treasuries, but there may not always be for some corporate bonds, due to a thin market with few buyers and sellers.
#liquidity #risk #bonds #treasuries
Interest rate risk refers to the potential for the value of an investment to fluctuate due to changes in interest rates.
When interest rates rise, the value of fixed-income securities typically decreases, as newer bonds offer higher yields.
Conversely, when interest rates fall, the value of existing bonds tends to increase, as their higher yields become more attractive.
The inverse relationship of interest rates and bond prices is an important consideration for investors, as it can influence portfolio performance and financial outcomes.
#finterms #interest #interestrates #risk #bonds
Wealth Management Services are offered through Baldwin & Clarke Advisory Services, LLC (BCAS). BCAS is a Registered Investment Adviser with the United States Securities and Exchange Commission (SEC). BCAS’ Form CRS and other disclosure documents can be found here. The information in this website has not been approved or verified by the SEC, or by any state securities authority. Additional information about BCAS is available on the SEC’s website at: www.adviserinfo.sec.gov, using CRD #105666.
Registration does not imply a certain level of skill or training.
