Tuesday, December 19, 2017
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Robert Brickson • Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler  Tom Toburen • Josh Kiefer • Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell

US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
12/11/17	1.18	1.33	1.47	1.69	1.82	1.95	2.16	2.30	2.39	2.59	2.77
12/12/17	1.26	1.34	1.70	1.83	1.95	2.18	2.18	2.32	2.40	2.60	2.79
12/13/17	1.22	1.30	1.47	1.68	1.79	1.90	2.12	2.26	2.36	2.56	2.74
12/14/17	1.21	1.32	1.48	1.70	1.82	1.92	2.14	2.27	2.35	2.53	2.71
12/15/17	1.24	1.31	1.48	1.71	1.84	1.95	2.16	2.28	2.35	2.52	2.68
12/18/17	1.26	1.38	1.51	1.70	1.84	1.94	2.17	2.30	2.39	2.57	2.74

                                                                                       Source: U.S. Department of the Treasury, as of 12/18/17  

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2018:  No Regrets

Thirteen days remain until 2017 comes to a close and the books roll to a new month and a new year.  Planning for the New Year has been underway for several months, with goal setting and budgets.  Year-end has always been a good time for portfolio managers to make sure their portfolio is positioned appropriately and aligns with their interest rate bias. 

This year, the year-end portfolio review presents a unique opportunity.  The impending GOP Tax Bill could go into effect on January 1, 2018, cutting taxes for corporations and certain individuals.  Though we won’t see lower taxes for a few weeks, we can take advantage of higher taxes this year through bond losses while there is still time.  Bond losses are not usually sought out but if you feel like a certain holding(s) needs to be culled, this is a great time to do so.  The tax credit will be much greater if taken in 2017 vs. 2018 or beyond under the new tax plan. 

Candidates to consider selling: 

• Municipals with recent rating downgrades nearing investment policy limits

• Lowest yielding holdings of Treasuries, Agencies and CD’s

• Underperforming MBS holdings

Example:  Below is a possible scenario of a C-Corp and S-Corp Bank taking bond losses of $100,000 in 2017 vs. 2018 under the new proposal.

If you would like to use higher taxes to your advantage this year while you can, let us know if we can help you identify candidates in your portfolio.

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

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