Morning Outlook – Important Sell Alert

The markets just caved (hopefully temporarily) on President* Biden’s announcement of a 43.4% Capital Gains Tax. The current tax is 20%. 

Remember, it does not take much of a gain on your home or stocks to put you in Biden’s “rich” category. While it is important to start working down the debt, this tax would wield a devastating blow to all capital assets, from real estate to stocks. This could literally kill the real estate market overnight. Do you have enough grey hair to recall the 1986 Tax Act and what it did to real estate and the Savings and Loan industry?

The proposed tax also has potential to cause anomalous behavior by investors before its passage. The proposed tax could also act as the catalyst for the 18-month cycle peak. I doubt it, but I will keep an open mind.

The ruling class in Washington D.C. right now is the most dangerous I have encountered in my lifetime. They are, in a word, scary.

Condolences to everyone, but there is a reason our Navigator Swing strategy remains 90% in cash and 10% in Gold. We are closing out the Gold position today. Taxes are deflationary.

A.F. Thornton