BNY Mellon's Keating Has Some Tips for Investors

Catherine Keating, the chief executive officer of BNY Mellon Wealth Management, which oversees $2 trillion of assets and serves 77% of the Fortune 500, has some advice for investors as the end of the year rapidly approaches: consider taking taxable gains now, especially in highly appreciated concentrated positions. This week’s guest on the Masters in Business podcast says if it makes sense for investors and fits with their long-term plans, selling stock in 2020 and rolling the proceeds into a more diversified set of holdings could avoid potentially higher capital gains tax rates in the future.

Keating, who has been named to the “Most Powerful Women in Finance” list and one of the “Most Powerful Women in Banking” list by American Banker, notes the advantages of carefully selected alternatives in an era of lowered return expectations. Capturing the illiquidity premium could make up the difference for a longer-term investor. She points out that in today's ultra-low interest rate environment, philanthropic gifts are "on sale." The compelling opportunity today is that low rates makes retained interest very advantageous.

Numerous technical estate and tax planning issues today seem historically unique. There are also numerous "tax alpha" strategies investors should explore. Estate laws that will lower the tax-free amount of estates are scheduled to expire in 2025, creating a "donut" investors need to plan around unless the new administration changes the law - which is unlikely.

A list of her favorite books are here; A transcript of our conversation is available here.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business podcast next week with Mike Swell, head of global fixed income at Goldman Sachs Asset Management. Swell is responsible for co-leading the global team of portfolio managers that oversee more than $700 billion in multi-sector bond portfolios.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.