The tax-code has favorable rules for those with realized losses in taxable accounts by allowing them to offset realized capital gains and ordinary income.

Any losses realized in excess of capital gains can reduce one’s ordinary income by up to $3,000 annually and can be applied to future gains and ordinary income.

When the market falls, investors receive an opportunity to generate tax savings and potentially rebalance their account at a discount.

The rise in inflation has led to an eye-catching rise in the interest rate offered by Series I Savings Bonds, a.k.a. I Bonds. The 7.12% rate on the current I Bond issue is hefty, but it’s important to consider several important details. I Bonds may be most appropriate for those looking for an alternative to cash or certificates of deposit (CDs).

The last twelve months have been a wild ride, as the financial markets echoed the emotional ups and downs of a challenging year. The battle against the pandemic and the economy are on better footing. Still, worries persist about what may be next for stocks and bonds. Tomorrow’s challenges will be different than today’s. Even though they are unknown, we have the tools to learn, adapt, and survive.

Has the latest rise in interest rates signaled an end to the 40-year bull market for bonds? History suggests the answer is more subtle. Despite low yields, we believe it is still important to understand the role of high-quality bonds in a portfolio.