Santa Rally continues, crypto tax strategies and more.
Mortgage rates ease and what that means for the housing market!
Before we jump into this week's top stories and analysis, I wanted to make sure each and every one of you have listened to the Rich Habits podcast episode we did with Troy Cates, Managing Partner at NEOS.
Austin and myself believe 2024 is going to be an awesome year for bonds, especially those with medium duration. If you're like us and don't want to have to pick and choose specific bond types, betting on the aggregate bond market (via BNDI) might be the best bet.
To watch the full episode on Spotify, click right here.
And remember -- SPYI is their ETF that seeks to distribute high monthly income generated from investing in the constituents of the S&P 500 Index and implementing a data-driven call option strategy. I included it in my video linked here!
BlackRock ETF Application Is EXTREMELY Close To Approval - Here’s What You Need To Know…
BlackRock’s application process seems to be moving inevitably to approval by the Securities Exchange Commission (SEC), and approval may be closer than most think. This could be a MAJOR catalyst for a Bull Market in 2024, and with the halving just months away, things look very bright for the crypto market for the foreseeable future.
What We Know:
On December 18th, an S-1 amendment from BlackRock consisted of several significant changes to its Bitcoin ETF application. In total, there were 6 total edits, which is down from 21 total edits made in its previous update. While this suggests that there is still work to be done to officially get the green light from the SEC, it shows that there has been significant progress made towards bringing their spot ETF to the US market.
What To Look For:
While there’s a lot of speculation surrounding ‘when’ the ETF could be approved, here’s what we know:
Beginning on January 5th and lasting through January 10th, the window for approval on the spot ETF opens back up. If BlackRock’s recent edits were enough for the SEC to give it the green light, then we could see approval on this ETF as soon as the first or second week of January.
Our eyes are locked in on the approval window, as we will find out exactly where BlackRock and its ETF application stands on that day!
Tax Strategies For Your Crypto Heading Into Tax Season
With tax season right around the corner, it’s time to start considering strategies for effectively managing the taxes you’re going to pay on your crypto investments. Here are 5 ways in which traders and investors can strategically minimize their tax payouts before the end of the year:
Tax-Loss Harvesting:
Sell investments that are at a loss to offset gains and reduce your overall taxable income. This can be particularly useful in the crypto space where prices can be volatile.
Be mindful of wash-sale rules, which prevent you from claiming a loss on a security if you repurchase it (or a substantially identical security) within 30 days.
Tax-Gain Harvesting:
If you have crypto investments with unrealized gains, you might strategically sell some to take advantage of lower tax rates or to utilize available deductions.
Consider the holding period, as long-term capital gains may have lower tax rates compared to short-term gains.
Balancing Gains and Losses:
Aim to offset short-term gains with short-term losses and long-term gains with long-term losses. This helps optimize your tax liability by minimizing the impact of higher tax rates on short-term gains.
Use of Capital Loss Carry forwards:
If you have capital losses that exceed your capital gains, you may be able to carry forward the excess losses to offset future gains. Understanding and utilizing these carry forwards can be part of a longer-term tax strategy.
Tax-Efficient Portfolio Management:
Consider tax implications when rebalancing your crypto portfolio. By strategically selecting assets to buy or sell, you can manage your tax liability more effectively.
Utilize tax-efficient investment vehicles, such as tax-advantaged accounts, where applicable.
The Santa Claus Rally Has Arrived Just In Time, BUT How Long Will It Last?!
The Santa Claus Rally: What Is It?
The "Santa Claus Rally" is a term used to describe a tendency in financial markets for stock prices to rise in the last few trading days of December and the first few trading days of January. This phenomenon is often attributed to increased optimism and positive sentiment among investors during the holiday season.
While not guaranteed, some market analysts and investors observe this historical trend and may anticipate a boost in stock prices around the end of the year. It's important to note that market behaviors can vary, and the Santa Claus Rally is more of a historical observation than a reliable predictor of future market movements.
Are We In A Santa Rally Now?
Last week, the S&P 500 had a massive week, closing the weekly candle up 2.43% and into this week has been overall green thus far. At the time of writing this, the SPX is less than 2% away from its all time high, so the question is whether the Santa Sentiment will be able to get the market to (or above) its all time highs!
Typically, Santa Claus Rallies last for a couple weeks, ranging from the last week in December through the first week or so of January. Again, this is less of a technical indicator, and more of a historical observation, but it begs us to ask the question: How long will this rally continue?
Do you think Santa will bring All-Time High’s for Christmas?
I think we should continue with our positive outlook rolling into 2024. And as always continue to actively manage your investments and stay diversified.
2024 Housing Market Outlook: Impact of The Federal Reserve's Rate Cut Plans…
Let's cut to the chase on what a potential Federal Reserve rate cut in 2024 means for the housing market. Here are 5 ways in which Rate Cuts will impact the housing market in 2024:
Fed's Influence on Housing:
When the Federal Reserve cuts interest rates, it often stimulates the economy. This can affect the housing market by making it more affordable for people to buy homes. This could have a negative impact due to the fact that easing rates could cause immediate price hikes and mass competition for inventory again.
Mortgage Rates Drop:
Lower interest rates usually lead to cheaper mortgages. This can encourage more people to consider buying a home, especially first-time buyers or those looking to upgrade.
Easier Homeownership:
With lower mortgage rates, people may find it easier to become homeowners but they may also pay more for the dream home they have been watching. This is good and bad depending on your timing of purchase. As in the past lower rates = increased competition so keep that in mind.
Refinancing Opportunities:
A rate cut often sparks interest in refinancing. Homeowners might take advantage of lower rates to improve their mortgage terms. This is also a good strategy when buying ahead of the masses. So keep that in mind as you can always buy now before the rates subside and refinance later. This can save potential owners a ton of money when buying ahead of the market for less.
Potential Rise in Home Prices:
Increased demand and favorable borrowing conditions could drive up home prices. This may benefit current homeowners by boosting property values.
As we navigate 2024, keep an eye on Federal Reserve decisions—they're key players in shaping the housing market. Stay informed and make strategic moves based on these evolving dynamics.
Ledger Wallet Users Exploited for Nearly $600,000… Here’s What You Need To Know
When it comes to storing and securing your crypto through self custody, the Ledger hardware wallet has been the industry standard for many years. Despite its high stature within the crypto community, Ledger experienced an “isolated incident” in which nearly $600,000 of user money was exploited according to various reports.
What We Know:
Last week, the Ledger Wallet experienced a major vulnerability that affected several of its Decentralized Applications, which ultimately impacted a software library the Ledger relies on. As a result, malicious code was injected into the front-end of the apps that allowed the hacker to steal assets from users.
Ledger referred to this incident as an “unfortunate isolated event” and that they’re going to do everything in their power to ensure that this doesn’t happen again.
Aside from just fixing the issue, they also promised that ALL affected users will be made whole by February of 2024, which is reassuring to many of its users.
Our hope is that this ultimately acts as a safety warning to Ledger and similar self custody solutions, to make this industry even more secure and safe moving forward. Other wallets that I use and like are Arculus and Trezor model T.
As the year comes to a close I wanted to wish you all a Happy Holiday and tell you how excited I am to continue this journey with each and every one of you into 2024!!!