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Rex Macey, CIO of Wilmington Trust Investment Advisors, on how the fiscal cliff stands to impact your portfolio and investments.
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Scenario -- Macy's chief investment officer of the Wilmington Trust investment advisors.
Which by the way has twenty billion dollars -- -- management joins me now and I'm Rex thank you for being -- one of my see you giving your clients with so much uncertainty out there especially.
About taxes.
Sure let's start with a simple advice.
What we have more conviction and if you've got stocks with capital gains that you're gonna sell over the next few years go ahead this -- 2012.
Enjoy the low 15%.
Federal capital gains rate don't take the risk that you're going to be paying 2324%.
Next year.
Even if the rates don't go out.
You -- save that much money by having a few dollars in your pocket.
For another twelve months -- so so capital gains.
Go ahead get those out of the way it's unusual usually we -- about taking losses yet now we're talking about taking -- -- -- dividend with us.
That's -- much trickier question because right now if nothing happens the rates on ordinary -- go from 15%.
For investor in the top bracket it's gonna be over forty -- -- But what we're suggesting as you hold on nothing is certain.
We don't expect the stocks themselves to suffer that's an important point because so many investors.
Our pension plan to their 401 -- that are in retirement funds.
That we don't expect those investors to pay any attention to the expiration of the tax cuts and historically -- stocks -- not moved.
In relationship to changes in taxes so we don't expect the stocks get -- right -- the value the investor does make a difference -- we would suggest is a wait and see attitude.
If you get a dividend in the first or second quarter next year the higher rate even -- it does materialize and isn't gonna make that they -- difference.
If you like the dividend paying stocks you have to day.
We would recommend holding on to him for now and Rex do you get the sense that most people think of -- not can actually go over the fiscal cliff that as always it will something we'll get access sorted out at the very last minute.
The level of the market and when you look at stocks like Lockheed Martin there's.
No evidence the market thinks we're going over the cliff.
It it seems almost pollyannish to me.
How benign the market is at this point.
Ali due for a correction then do you think.
Well we -- we think we're in for some.
Volatility especially as we approach.
The fiscal cliff what could very well happen come November is that some of the company's complete defence companies.
Start sending out notices to their employees into.
About plant closing in layoffs and if that happens we think they'll be a lot of chatter.
A lot of back and forth and and that could crates and jitters before right now.
We don't see it and I'll point out that we've had the debt ceiling increased.
Without.
Political -- -- that we used to or may be expecting.
So right now the market is telling us that it is it always -- -- looks good -- Look through rose tinted glasses -- they say Rex Macey thank you so much for joining us we appreciate it thank.
