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Personal finance + economics + markets

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Good morning investors! Bitcoin is preparing for a bull run but stocks appear to be resting.

Fun fact: The smallest unit of bitcoin is called a “satoshi,” which is equal to 0.00000001 BTC.

Today we cover:

• Homes are getting expensive. 🏠

• Family offices are ditching stocks. 💵 

• Do this to minimize crypto taxes. 🪑 

Follow us on Twitter for more.

📊 Economy and News 

US homes are getting more expensive

US homes got more expensive in September, hitting a new record high and marking the eighth consecutive month of increases.

Why? High mortgage rates are impacting supply, which is pushing prices higher.

The impact: People cannot afford to buy new homes, thus existing home sales are now at a 13-year low. As a result, buyers are turning to the new construction market, helping new home sales tick up in September, climbing 33.9% year over year. We saw existing home sales drop 4.1% in October with inventory declining by 5.7% on a year-on-year basis.

Builders seem to have noticed this and new homes are now increasing in supply. Almost 1 in every 3 homes available on the market in September was newly constructed, almost twice the pre-pandemic share.

How expensive? Prices rose 0.7% in September from the month before. Compared to a year ago, the national composite index also rose, with prices up 3.9% from September 2022.

Almost all states are now more expensive to buy homes in than they were last year. The bulk of homes sold last month were in the $150,000 to $499,999 price range with the median house price rising 3.4% year-on-year to $391,800.

Global hits:

• Tesla scores court win in Sweden in month-long battle with unions. 🙅‍♂️

• Pinduoduo transaction revenue surges 315% as Chinese consumers hunt for bargains. 👌

• New Zealand dollar jumps 1% as central bank holds rates, warns of more hikes. 👀

Also check: Gas prices drop more than 60 days in a row. 😮 

📈 Stocks

S&P 500 4,554.89 (+0.098%)
DJIA 35,416.98 (+0.24%)
NASDAQ 16,010.43 (+0.30%)
BRENT CRUDE 81.96 (-%)(+0.34%)
* Prices as of Nov 29th, 12:20 AM UTC

Family offices are ditching stocks

Family offices, the private investing arms of families with assets typically of $100 million or more, now have more of their money invested in private markets than the public stock market.

What do the numbers say? According to the latest report, family offices had 29.2% of their investments in private markets, which include private equity, venture capital and private debt, compared to 28.5% in publicly traded stocks.

It marks the first time that family offices had more invested in private markets than public stock. Their stock allocation has come down from 31% the year before, while their private investments increased from 27%. The remaining assets were invested in cash, bonds, alternatives, hedge funds, commodities, real estate and other investments.

Why? Family offices say private markets offer better returns over the long term without the volatility of stocks.

What’s next? They plan to concentrate even more heavily on private markets in the coming months. About 41% of family offices plan to boost their allocations to private equity funds, and a third plan to put more money into direct private equity deals.

Only 23% planned to add to their developed-market public stocks, while 15% plan to trim their stock holdings, according to the survey. However, we’re not sure if this strategy will be beneficial.

Private equity funds are struggling with tight financing and expensive loans, along with a lack of exits given the drought of IPOs. Also, family offices are still invested in stocks, just not as heavily as they once were.

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💵 Personal Finance

How To Minimize Crypto Taxes

Crypto is once again increasing, which means some investors will be walking away with profits. The only bad thing about this is the tax you’ll have to pay on capital gains. But, there are ways to save ‘crypto tax’, here’s how.

• Mitigate gains with losses. As is the case with any investment, you can leverage crypto gains by offsetting them with losses from other investments throughout the year. This strategy, known as tax-loss harvesting, allows you to write off a maximum of $3,000 in a given year.

• Retain your crypto for the extended term. By maintaining a crypto investment for a minimum of one year prior to selling, you become eligible for the advantageous long-term capital gains rate.

• Factor in mining expenses. Despite the seemingly cost-effective nature of crypto mining, it involves substantial expenditures such as computers, servers, electricity, and internet service provider fees. If you engage in crypto mining, you can deduct these costs from your mining income, although the deductible amount hinges on whether you classify your mining operation as a business.

• Engage in charitable giving. If you find yourself with more crypto profits than necessary, consider alleviating your tax liability by donating a portion of your crypto to charity. You'll receive a deduction equivalent to the fair market value of your crypto at the time of donation.

• Know when to sell. If you have the flexibility of time, consider waiting for a more favorable tax rate before selling your crypto.

• Explore retirement investment options. Opting for crypto investments within a retirement plan, such as a traditional individual retirement account (IRA) or Roth IRA, enables you to defer or potentially eliminate investment gains. However, this route is more complex compared to investing through a standard brokerage account.

What if I avoid crypto taxes?

Not paying taxes is not recommended as it’s illegal and could result in interest, penalties, or even criminal charges. Furthermore, you may even receive a letter from the IRS if you fail to report income and pay taxes on crypto, or do not report your transactions properly.

Check this video for more on how to save taxes on crypto:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.