Planning Essentials:
Strategies for 2017

This year is destined to hold significant change. A new administration has taken the helm in Washington, tax laws may face an overhaul and interest rates appear poised to head higher after years at historic lows.

While it is impossible to know now just what many of these changes might be, and how they may affect you, staying informed and following a sound financial plan will be as important as ever. Shifts in legislative and monetary policy have implications not only for investing but in all areas of your financial picture. To stay abreast of tax law proposals, and what they might mean for you, see In Your Interest: The Tax Change Agenda.

To help prepare you for both the opportunities and risks we see ahead, we have identified a number of strategies and ideas to help address the potential impact that changes in Washington and around the globe may have on personal balance sheets. They range from investing and borrowing techniques, to guidance on charitable giving, and ways to protect against cybercrime.

Set Expectations Around Market Volatility

Volatility is a normal part of investing, and every year presents opportunities and challenges. Even in years when equities experience stretches of weakness, the market usually recovers. In fact, stocks have delivered positive returns in roughly 80% of the years since 1980.

Evaluate Cash Balances Against Your Goals

You may want to evaluate your cash-flow needs for year-end as well as for 2017. As with any other asset, you need to allocate your cash in ways consistent with short-term liquidity needs, investment goals and risk appetite. Then you can consider allocating funds in appropriate short and intermediate vehicles to ensure your cash is working for you until you need it. You may also want to consider having a line of credit in place to have access to liquidity.

Review Your Bond Investments

Interest rates appear headed for moderate moves higher should the U.S. economy continue to recover in 2017. Besides affecting the cost of borrowing, even small changes in rates can make big differences in the performance of investment portfolios. Consider a careful evaluation of your fixed income holdings.

Empower Your Charitable Giving

A donor-advised fund (DAF) is a charitable giving vehicle that is easily established so you can enjoy a potential tax deduction while having time to thoughtfully select charitable organizations. You also have the additional benefit of having your donated assets invested to grow free of federal and state taxes.

Increase Exposure to U.S. Stocks

Stronger earnings and the potential for pro-growth policies could boost U.S equities this year. Optimize positions today and be prepared to add to them during pullbacks, which may not last long.

Review Real Estate Holdings

The way you hold real estate affects your privacy, your tax position and your estate. Whether you’re buying a residence, vacation home or investment property, the structure of the purchase is as meaningful as the home’s location.

Consider How Borrowing Might Boost Tax Efficiency

Employ smart borrowing strategies such as using credit to buy taxable investments. The interest on a mortgage or home equity line of credit may be deductible against taxable investment income.

Avoid Becoming a Cybercrime Victim

We are doing more than ever to protect our clients, but vigilance is our shared responsibility. We’ve created a series of short films to help you understand the threat and steps you can take now to help keep you from becoming a victim of cybercrime.

To learn more about these and other planning strategies, we invite you to contact us and a J.P. Morgan representative will be in touch with you.

1. Past performance is never a guarantee of future results.

This article is filed under:
Connect with us
We look forward to speaking with you about how we can put our local experience and global reach to work for you

JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.

This material is for information purposes only, and not an offer or solicitation to enter into a transaction. The views and strategies described in the material may not be appropriate for all individuals. Each recipient of this material, and each agent thereof, may disclose to any person, without limitation, the U.S. income and franchise tax treatment and tax structure of the transactions described herein, and may disclose all materials of any kind (including opinions or other tax analyses) provided to each recipient insofar as the materials relate to a U.S. income or franchise tax strategy provided to such recipient by JPMorgan Chase & Co. and its subsidiaries.

The discussion of loans or other extensions of credit in this material is for illustrative purposes only. No commitment to lend by J.P. Morgan should be construed or implied. Lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Any extension of credit is subject to credit approval by the lender in accordance with the terms contained in definitive loan documents. Loans collateralized by securities involve certain risks and may not be suitable for all investors. Assets used as collateral for a securities based line of credit are subject to liquidation to meet collateral/maintenance calls. Collateral/maintenance calls may include the sale of the asset serving as collateral if the collateral value declines below the amount required to secure the line of credit. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have.

Estate planning requires legal assistance. You should consult with your independent advisors concerning such matters. Investment ideas presented herein may not be suitable for all investors. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Asset allocation and diversification do not guarantee investment returns and do not eliminate the risk of loss. Speak with your J.P. Morgan representative concerning your personal investment needs.