Tax Increases and Stocks

January 22, 2021    |    Sage Capone

Recently, I have received several calls from Hawaii Investors on concerns of potential tax increases and if they could have negative consequences for the stock market.

Since 1950, there have been 13 cases of either personal, corporate or capital gains tax rate increases for one reason or another.

The market had a negative return in only one of those years, and overall it had an average annual return to the S&P 500 at 12.15%. That is slightly above the long-term average. 

In brief, the objective data suggests that tax increases do not have a negative impact on market returns. 

Source: Fidelity

Past performance is no guarantee of future results. Not a recommendation for any stock but used for illustration purposes. Allocations can change at anytime without notice.