On Tuesday, markets focused on remarks by the FED chair that he now appears to view inflation as not being so transient and therefore indicates he wants to taper and end bond buying somewhat sooner. The Omicron virus also weighed on markets.
The S&P 500 was down 1.9% and Toronto as down 2.3%.
Most investors have big gains on stocks and the risk of a pull back may be spurring people to sell and lock in profits.
So far, it’s not clear that this pull back will be a large one. Only time will tell.
I trimmed my Toll Brothers position somewhat today. These shares are held in a corporate account and I wanted to raise cash in that account.
There is reason to fear that Canada could raise the amount of capital gains that are taxable form 50% to as high as 75%. Apparently it could happen in a budget speech around the end of February and might be effective the day of the budget. This possibility means that it might be better to realize gains now (taxable in 2021) or in January to avoid the increased tax rate. That is especially the case if someone was planning to realize gains in 2022 in any case. But the increased tax rate may not happen so realizing a gain now or in January could turn out to be a mistake. That’s the nature of investing. The course is never entirely clear.