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Top Priorities for Investors in November and December

What to Focus On

The most important thing for investors in the months of November and December is to be prepared for potential volatility. The stock market tends to be more volatile during these months, as investors adjust their portfolios for the end of the year and the upcoming holiday season. Money managers like us tend to help clients tidy up just before the end of the year. There's a good number of clients who like to hold off until year-end to take things like their RMD or gifting.

Here are some specific things that investors can do in November and December to protect their investments:

  • Review your asset allocation and rebalance your portfolio as needed. Make sure that your portfolio is still aligned with your risk tolerance and investment goals. If necessary, make adjustments to your asset allocation to reduce your risk exposure. Good-performing asset classes can shift the weight of your holdings dramatically throughout the year.

  • Consider tax-loss harvesting. If you have unrealized losses in your portfolio, you may want to consider tax-loss harvesting. This involves selling investments with losses and using those losses to offset capital gains taxes on other investments. For some this is a manual process of engaging their advisor, others request that we handle this for them every year without the need for a discussion.

  • Be prepared for a potential Santa Claus rally. Even some adults believe in an end-of-the-year bonus delivered by the jolly guy himself. The Santa Claus rally is a seasonal phenomenon in which the stock market tends to rise in the last few weeks of the year. Investors should be prepared for this possibility and have a plan in place for how they will respond. Whether or not some nice returns are delivered by the husky-built man in a red suit or not, we can all use a little jolt in our accounts.

Here are some additional things that investors should keep in mind in November and December:

  • The Federal Reserve is expected to continue raising interest rates in an effort to combat inflation. It's no surprise, they've been telling this all along. This could lead to some volatility in the stock market, as investors adjust to the new interest rate environment.

  • The earnings season for the fourth quarter will be underway in November and December. Investors will be paying close attention to the results of major companies, as these results will provide insights into the performance of the economy as a whole. This is typically one of the largest driving forces on the movement of the overall economy.

  • The holiday season can also lead to volatility in the stock market, as investors lighten up on their holdings in order to raise cash for spending. Investors should be prepared for this possibility and have a plan in place for how they will respond.

Overall, the most important thing for investors in November and December is to be prepared for potential volatility. By following the tips above, investors can protect their investments and position themselves for success in the future.

If you haven't checked out my PennyWise Financial Podcast, watch a look at a clip from our latest show with guest Frank DeSantis from Salvatore's Barber Shop in Chili, NY. Scroll down to watch the entire episode. It's available on all major podcast platforms like Apple, Google and Spotify.

👇Or click below to watch the full Episode

Everyone wants to offer advice. We hope you have the right person. A trusted person to guide you on your path to achieving your goals. If you're not working with the right team or want a second opinion, we hope you consider our services. Follow our content to learn more about our process, and investment philosophy and hear real-life accounts of what our clients are dealing with and how we help them.

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