Broker Check


June 02, 2022

Did you ever wonder about the first person to pick a lemon from a tree, taste the sour fruit and say, “This would make a deliciously sweet summer drink?”.  Imagine having such vision as to be able to see pleasantness when everyone else could only see bitter?

Today’s investment marketplace has been bitter for many investors.  Yet, in the heart of other’s despair lies the sweet taste of opportunity.

Here are 5 strategies you can use today to turn your investment experience from bitter to sweet:

Strategy #1: Purchase stocks at relatively low prices

Everyone knows the first rule of investing is to buy low and sell high.  Yet, executing on this strategy can be emotionally difficult.  Picture this internal debate, “The XYZ company is down 25%.  I should buy it now.”  “Wait, the stock is down 25% why in the world would I buy that company when another stock is selling at an all time high?”

Market declines are buying opportunities.  Remember, every single time the stock market has gone down in the past, it has eventually rebounded and set a new all-time high.  When do you want to buy stocks, when they are down or at that record high? 

This is strategy is particularly helpful for those who are net accumulators, i.e., adding to their retirement portfolios.

Strategy #2: Rebalance Your Portfolio

Even if you don’t have capital sitting on the sidelines waiting to invest, you can take advantage of the volatile markets.  A review of your portfolio will indicate that some assets have fallen or risen faster than others.  As a result, certain assets and asset classes now represent a disproportionately large or small segment of your net worth.  By systematically selling from the profits of those assets that are relatively high and using the proceeds to purchase those assets that are low you will be strategically implementing the “buy low, sell high” rule.


Strategy #3: Consider Series I Savings Bonds

Series I Savings Bonds are issued and guaranteed by the US government.  Their interest rate is tied to inflation and reset every 6 months.  The current interest rate on these bonds is 9.62% for the next 6 months!  Think about that—9.62% and guaranteed by the US government.

Series I Savings Bonds do have some rules to which you need to pay attention. Each person can only purchase up to $10,000 in Series I Savings Bonds in a calendar year, however each person in your household is subject to a separate $10,000 limit.  The bonds are only issued in electronic form on the website.  An additional $5,000 paper bond can be purchased as part of your income tax refund. The bonds need to be held for at least 1 year.  After 1 year you can cash them in by forfeiting 3 months’ worth of interest.  If you hold the bonds for 5 years or more, no liquidation penalty applies.

If you can live with the limitations stipulated above, Series I Savings Bonds can provide stability and income at a time when both are difficult to find.  The next time you fill up your tank of gas or complain about the price of groceries think about Series I Savings Bonds.

Strategy #4: Harvest Investment Losses for Tax Purposes

Even if your investment is worth less today than when you originally purchased it, there is still value in that security beyond its stated price.  Investment losses may be tax deductible.  These losses are first used to offset investment gains.  If your losses exceed your gains, they can be used to offset up to $3,000 of ordinary income.  Losses that exceed the amount allowable to offset ordinary income can be used on the current year tax return can be carried forward to future years where they can be used to offset future gains and ordinary income.

Not all investment losses qualify for tax deductibility, and special rules apply if you sell a security and quickly repurchase it.  We recommended you always consult with your Tax Advisor before making any transaction.

Strategy #5: Consider Converting a Portion of Your Traditional IRA into a Roth IRA

Monies held in a Traditional IRA are tax deferred.  That means, you will eventually have to pay taxes on those funds down the road.  In a Roth IRA you pay tax when money is deposited, and withdrawals are generally made tax free.  If your account balance or a particular holding is relatively low now, consider converting it into a Roth IRA.  You will have to pay tax on the amount converted, but the tax is based on this relatively lower amount.  Once converted into a Roth IRA, any future growth will be both tax deferred and qualifying withdrawals will be tax-free.  After all, would you rather pay taxes on a smaller amount today, or the larger amount tomorrow?

Remember, Roth conversions will incur taxes in the current year.  It is important to bring your Tax Advisor into any discussion of IRA conversions before executing this strategy.  IRA conversions can result in adverse effects to Medicare Part B and D premiums, claw back of certain tax deductions and the phase out of some tax credits.


Drinking just the juice you squeeze from a lemon will not quench your thirst nor leave you satisfied on a hot summer day.  However, by following a strategy of mixing it with water and sugar you can produce a refreshing drink.  If your investment results this year are leaving you with lemons, consider the above strategies to sweeten your experience.

 Now can someone explain how the first person to bite into a jalapeno pepper thought to combine it with chips and cheese to make delicious nachos?