If you’re managing your own investments, here’s a pro tip: take some time now, before the holidays, to get your investments in order.

Getting a headstart on your year-end plans can give you some peace of mind and help you end the year organized and prepared.

This is what we’re doing for our money management clients this month: we’re paying attention to the early estimated year-end distributions from mutual funds; looking for ways to reduce taxes; making sure clients take their required minimum distributions (RMDs) and updating their retirement contributions and withdrawals.

You can do the same in your portfolio.

Here are the four key things every investor should do at year-end:

1. Keep an eye on mutual fund distributions

Nearly all stock funds distribute capital gains and income to shareholders at the end of the year. Most funds distribute in December, but some funds make payouts in November, including Ariel, Artisan, Baron, Hussman, Leuthold and Parnassus.

If you own funds in a taxable account, these distributions are taxable to you whether you take them in cash or reinvest them in new shares, so trade carefully this time of year. Before buying a fund, check with the fund to see if it plans to make a distribution. You may opt to buy ETFs, since most ETFs don’t pay out capital gains, and most distribute income quarterly.

2. Harvest losses in taxable accounts

The end of the year is an opportunity to lower your tax bill by realizing losses where you can. When you sell shares of a fund at a lower price than you paid for them, you realize the loss in that investment. And you can use those losses to offset taxable gains that you have already realized, so selling those losing shares before year-end makes sense.

Review your portfolio and look for any funds you own that are worth less than you paid for them. This may include funds that you’ve actually made money on, but you can still have an unrealized loss because of a reinvested distribution.

Of course, remember the wash sale rule: if you’ve sold a fund for a loss, you can’t buy it back within 30 days. If you do buy back into the fund, you can’t use the loss to offset other gains.

3. Take your required minimum distributions (RMDs)

Continue reading “Pro tip: Get a head start on your year-end investment plans” »


Thinking about buying into strong-performing small-cap funds?

This year’s small-cap trend was one of the topics that FundX Chief Investment Strategist Jason Browne covered on Reuters TV on August 3, 2018.

“Everyone’s talking about the S&P 500 getting back near its highs back in February, while small caps have been making new highs for some time,” Jason said.

Watch Jason’s Reuters interview here and get his small-cap tips below.

If you’re thinking about investing in small-caps, here are a few things to keep in mind:

1. Within the small-cap trend, “small-cap growth [as opposed to value style] in particular has been pretty strong,” Jason said. He pointed to iShares Small Cap S&P 600 Growth ETF (IJT) as one way investors can get exposure to this area.

2. Keep risk in mind. Small-cap funds aren’t for everyone. “Small caps are part of the more aggressive part of your portfolio,” Jason said.

3. Recognize that these funds could get hit if the market sells off. “When we have any kind of a pullback, usually whatever’s been doing the best tends to get hit hardest, and you saw that with small-caps and technology late July,” Jason said.

4. Remember that large-cap funds are still favor, and these funds tend to be less volatile than small-cap funds.

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