As the new year begins, many of us aim to adopt healthier diets and habits. Similarly, it’s crucial to pay attention to our finances and investments at the start of the year.
Our investment decisions are guided by our research and the evaluations we make about the companies we own, their expected growth, profitability and financial stability. Some industries focus on short-term outlooks, while others take a longer view. Each company’s growth path is unique, and understanding this is key to making informed investment choices.
The new year also brings the challenge of preparing for Tax Day. The upcoming tax season and the new administration’s policies will be significant. Tax cuts from the Trump administration are set to expire at the end of 2025. While corporate tax reductions were made permanent, individual tax cuts were temporary. Economic forecasts suggest these tax cuts might be extended, providing much-needed certainty for planning.
At Circa Capital, we prepare our clients for any changes, good or bad. Given significant news events this year—the Gaza ceasefire, Ukraine peace talks, DeepSeek’s impact on technology, China’s economic weakness, US tax policy—it’s essential to act proactively rather than reactively.
One of the best strategies for clients is rebalancing their asset mix. The primary decision involves determining the right balance between equity (risk) and bonds (safety). With the stock market’s strong performance over the past two years, we have an opportune moment for taking some profits from companies that have grown a lot, and investing in others that may be a better value, all while making sure we have a good balance between growth and income investments.
We aim to serve our clients not only in an investment role but also as partners. Our goal is to ensure that risk and return, and lifestyle choices are considered to give us the best chance of meeting your needs. To that end, please let us know if you have had any changes to your financial situation you want for us to take into account. We are here to help.
~Steve Davenport, CFA