TRUMP ON, RISK OFF

摘要

In the aftermath of the election, most fixed-income investments have traded down significantly. It seems the market has taken the decision-making process on interest-rate levels away from the Fed, thereby reducing its relevance to the setting of rates. That leaves income investors like me suddenly looking for a "safe space" to invest. Uncertainty and volatility are likely to be the big themes in 2017 as Trump's economic policies begin to take shape, so finding suitable income investments is not going to be easy. A first step is to do your year-end tax-planning trading with a view toward minimizing taxable gains. If Trump's plan succeeds, tax rates are likely to go down next year. I also recommend maintaining a cash level of at least 20%. If you have loss-carryforwards, use them to harvest those diminishing gains.