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In today’s unpredictable market environment, it’s natural to ask: What should I be doing right now? With constant headlines and market swings, the instinct to act—whether by rebalancing, buying, selling, or simply holding—can feel overwhelming.

At FNBC Bank & Trust, we believe that successful investing doesn’t come from reacting emotionally to short-term fluctuations. Instead, we guide our clients toward thoughtful, proactive strategies that can turn volatility into opportunity.

Not FDIC Insured/ May Go Down in Value/Not Guaranteed by Bank/Subject to Investment

Smart Strategies for Uncertain Markets

1. Tax-Loss Harvesting

One often-overlooked way to make market declines work in your favor is through tax-loss harvesting. This strategy involves selling investments at a loss to offset gains elsewhere in your portfolio. If your realized losses exceed your gains, you can deduct up to $3,000 from your ordinary income and carry forward the rest indefinitely.

Market downturns may create new opportunities to realize losses—but you must be careful to avoid the wash-sale rule, which disallows the deduction if you repurchase the same or a substantially identical investment within 30 days. If that happens, the disallowed loss is added to the cost basis of the new purchase, effectively deferring the benefit.

At FNBC, our financial advisors can help you navigate these rules and determine whether tax-loss harvesting is the right fit for your portfolio.

2. Roth IRA Conversions

When markets drop, Roth IRA conversions may become more appealing. If the value of your Traditional IRA is temporarily lower, converting some or all of those assets to a Roth IRA means paying taxes on a reduced amount—potentially saving you money.

This strategy is particularly attractive for individuals in lower income years, such as those already in retirement or those expecting lower taxable income this year. Once in a Roth IRA, the future growth and qualified withdrawals are entirely tax-free.

Additionally, converting to a Roth can help reduce your future Required Minimum Distributions (RMDs), which might otherwise push you into a higher tax bracket later in retirement.

When evaluating a Roth conversion, consider a barbell strategy:

• Convert a portion now while asset values are low.

• Convert more if markets decline further.

• Spread the conversions across tax years to manage your overall tax exposure.
  
  

Our team at FNBC can work with you to determine the timing, amount, and documentation required for a successful conversion—ensuring proper use of IRS Forms 1099-R and 5498.

3. Stock Options and Equity Compensation

If you have stock options or restricted stock units (RSUs) as part of your compensation package, market volatility could provide a tax-planning window.

For example, exercising non-qualified stock options (NSOs) when the company’s stock price is low can reduce the immediate income tax liability (since it’s based on the difference between market value and exercise price). Any future appreciation could then be taxed at long-term capital gains rates if you hold the shares for over a year.

However, equity compensation comes with complex tax implications. FNBC recommends a detailed conversation with a qualified financial professional to help assess timing, risk exposure, and diversification considerations.

Turning Volatility into Opportunity

Periods of uncertainty can create anxiety—but they can also open the door to strategic tax planning and long-term financial advantages.

At FNBC Bank & Trust, we’re committed to helping our clients make informed decisions, no matter the market conditions. If you’re interested in exploring strategies like tax-loss harvesting, Roth IRA conversions, or stock option planning, connect with one of our trusted advisors today. We're here to help you stay focused, stay calm, and stay on course.

Not FDIC Insured/ May Go Down in Value/Not Guaranteed by Bank/Subject to Investment