A hallmark of wise planning is to diversify risk across a range of assets and asset types because any one asset or asset class might underperform in a given year. Diversification can help offset underperformance. This risk can be magnified when an individual has a heavy concentration in one stock or asset. While capital gain rates are currently at near-historic lows and the stock market at an all-time high now may be a time to consider repositioning because President Biden campaigned on increasing capital gains tax – both during life and at death. Where an individual has a life insurance need, a life insurance death benefit might also help add stability to an overall financial plan.
DID YOU KNOW?
- Too much of any one company’s stock increases your exposure to company specific risk and stockprice volatility.
- President Biden campaigned on replacing the 20% capital gain tax rate with ordinary income taxrate of 39.6% for incomes of over 1 million and eliminating stepped-up basis at death.