Tax-Wise Investing After a Liquidity Event

I want to briefly write about a situation many investors eventually face — a liquidity event.

This could be the sale of a business, the exercise of stock options, an inheritance, or the sale of a highly appreciated investment. Suddenly you have a significant amount of cash that needs to be invested thoughtfully.

One approach that can be very useful in these situations is a separately managed account, or SMA.

With an SMA, instead of owning mutual funds and ETFs alongside thousands of other investors, the portfolio is built using individual securities that are owned directly in your account. That gives you a lot more flexibility, specifically around taxes.

For example, we can control capital gains and avoid the embedded capital gains that come with mutual funds and ETFs. We can manage tax exposure more carefully and harvest losses if appropriate. We can gradually invest large sums of money in a disciplined way rather than all at once and we can construct your portfolio in a way that supports long-term tax planning.

SMAs were once largely reserved for ultra-high-net-worth investors because they required large minimum investments and were expensive to administer. Advances in trading technology, portfolio management platforms, and fractional share capabilities have significantly lowered those barriers. As a result, SMAs have become more accessible, giving investors dealing with large inflows of capital greater control, as well as the customization, transparency, and tax management benefits that many traditional pooled investments cannot provide.

If you’re anticipating a liquidity event or recently experienced one, it’s worth discussing how an SMA can benefit you. If you’d like to learn more, reach out to me here.

Got a 1099-R?

In my last post I talked about the various 1099 forms you might receive for your investment accounts. Today I want to briefly expand on one in particular — the 1099-R.

For those who aren’t retired, you might be wondering why did you receive a retirement account distribution 1099. After all, you didn’t take money out of your retirement account…right?

Well, in some cases, you did — at least technically.

If you rolled over an old 401(k) or 403(b) into an IRA, that transaction is considered a distribution from the original account. Even though the money stayed within the retirement system, the IRS still requires that money movement to be reported.

Ideally, that rollover was done as a direct rollover. That means the funds were sent directly from the old custodian to the new one, rather than being directly paid to you. That’s why rollover checks are typically made payable to the new custodian with FBO (for benefit of) plus your name.

So, while the transaction shows up as a distribution on the 1099-R, it’s usually reported on your tax return as a non-taxable rollover. Assuming it was handled properly.

The key takeaway is simple: if you receive a 1099-R, make sure your accountant has it so they can report the transaction correctly.

If you have questions about any tax forms related to your investments, reach out to me here.

Markets Run on Emotion

People often think the stock market moves because of math and earnings reports — but in the short term, it’s really driven by human psychology.

When investors feel confident, buying pressure increases. When they feel scared, here comes the desire to sell. That’s why you see markets swing up and down even when nothing fundamental has changed.

Optimism can drive prices higher than fundamentals suggest, while doubt and uncertainty can push them lower. And headlines tend to amplify both emotions.

Over time, markets usually reflect business growth and profits — but day to day, they reflect how people feel about the future.

That’s why long-term investing is so powerful. Instead of reacting emotionally to every headline, successful investors focus on discipline, diversification, and staying invested through the ups and downs. The market doesn’t reward panic…it rewards patience. If you need help staying patient, reach out here.

Getting Ready for Tax Season?

Tax season is upon us. So, let’s make sure your accountant has everything he or she needs from an investment standpoint.

First on the list are 1099s. You might have: 1099-DIV, -INT, -B, for example. These report monies like interest, dividends, and capital gains and they’re critical to accurately preparing your return. If you did an IRA distribution or a 401(k) rollover, then make sure you get your 1099-R. This form reports to the IRS any distribution from a retirement account. Even when a rollover is completed properly and no tax is ultimately owed, the IRS may interpret the distribution as unreported income, which can lead to potential tax issues.

Also, don’t forget that some 1099s aren’t available until February or even March. This delay has to do with the type of investment in the account. Certain investments – like partnerships, real estate funds, or other alternative holdings – take longer to calculate their final income and tax figures. So, your custodian can’t issue a finalized 1099 until those numbers are determined.

Did you make an IRA contribution? If not, you still have time. Let your accountant know how much and into which account: Traditional or Roth. Some people like to have their tax returned prepared and then determine their IRA contribution.

If you use a 529 college savings plan, you’ll want to inform your accountant of any contributions or withdrawals. Contributions don’t receive any federal tax breaks, but they can at the state level.

The bottom line is that your accountant and your investment advisor work best as a team. If you’re not sure which documents apply to you, where to find them, or if you’d like us to coordinate directly with your accountant, reach out to us.

Markets Panic; Plans Don’t

Why your retirement plan should ignore the news…

Markets recently reminded us how quickly headlines can move prices—and how quickly those moves can reverse.

Just days ago, news about proposed Greenland-related tariffs erased the stock market’s year-to-date gains in a single session. The next day - as the rhetoric cooled - the market rebounded just as quickly. Nothing fundamental about long-term economic growth or corporate profitability changed—only the headlines did.

This is why filtering out short-term noise is so important in retirement planning. Daily market swings are often driven by emotion, speculation, and uncertainty—not by changes that affect a long-term financial plan. Reacting to every headline can lead to poorly timed decisions, increased stress, and outcomes that work against your goals.

Successful retirement planning isn’t about predicting the next news cycle. It’s about maintaining a disciplined strategy, staying diversified, and keeping your focus on what truly matters: your long-term objectives, time horizon, and risk tolerance.

Volatility will always be part of investing, but a sound plan helps you look past the noise and stay on course. If you need help filtering out the noise and staying the course, reach out to us here.

What's In The Mix For '26?

As we wrap up 2025 with our third straight year of double-digit growth in the stock market, what does that mean for 2026?

The answer is…“I don’t know.” I could end the post here, but where’s the fun in that. Instead, I will offer this up. We typically see three out of every four years of positive returns for the stock market. So, we just had three, does that mean year four will be a down year?

Not necessarily.

Markets don’t follow a calendar, and they don’t follow a pattern, either. What does matter is having a plan that works in up years, down years, and everything in between. Whether 2026 brings more gains, a breather, or a bit of turbulence, the real key is staying disciplined, diversified, and proactive.

As we head into “the mix for ’26,” I’ll be right here helping you make smart decisions with your money—no matter what the market decides to do. If you need help, please reach out to me.