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Just one month before the holiday season kicks into high gear, 60% of adults said they are living paycheck to paycheck, according to a new LendingClub report.
Yet consumers still plan to overspend during the holidays, other reports show.
We are in a period of “hyper-consumption,” says Jacqueline Howard, head of money wellness at Ally Bank.

Shoppers expect to overspend during the holidays

The LendingClub report was conducted in October, just one month before the holiday season kicks into high gear.
This year, holiday spending during the Thanksgiving week may hit a record as consumers try to maximize the weekend’s deals, according to a 2023 Deloitte Black Friday-Cyber Monday survey. Spending over the week is expected to jump 13% from last year, with shoppers shelling out $567 on average, Deloitte found.

Barbie dolls (R) are displayed for sale ahead of Black Friday at a Walmart Supercenter on November 14, 2023 in Burbank, California. 
Mario Tama | Getty Images News | Getty Images

Even as credit card debt tops $1 trillion, almost all — or 96% — of shoppers said they expect to overspend this season, according to a separate TD Bank survey.

Half of consumers plan to take on more debt to pay for holiday expenses, another report by Ally Bank found. Only 23% have a plan to pay it off within one to two months.
Some 74% of Americans say they are stressed about finances, according to a separate CNBC Your Money Financial Confidence Survey conducted in August. Inflation, rising interest rates and a lack of savings contribute to those feelings.
That CNBC survey found that 61% of Americans are living paycheck to paycheck, up from 58% in March.

Many households have tapped their cash reserves over the past few months, LendingClub and other reports show. More than one-third of consumers plan to dip into their savings even more to cover holiday spending, LendingClub also found.
“While consumers have found a way to manage through inflation, it’s concerning that many plan to tap into savings, and even exceed their budgets, to finance their holiday purchases, which may leave them vulnerable to an unexpected emergency,” said Alia Dudum, LendingClub’s money expert.

‘Hyper-consumption comes from not being mindful’

Consumers are increasingly adopting a “mentality of hyper-consumption,” said Jacqueline Howard, head of money wellness at Ally. That’s particularly true over the holidays, when families typically overspend on gifts.
“Hyper-consumption comes from not being mindful,” she added. “Consider what makes the most sense in terms of your well-being.”
Howard recommends a value-based budget approach when it comes to budgeting for holiday purchases — “if your priorities are family and travel or other experiences, have that guide your spending,” she said.
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A Starbucks store is seen inside the Tom Bradley terminal at LAX airport in Los Angeles, California.
Lucy Nicholson | Reuters

Earnings season has a way of revealing which companies can thrive despite near-term headwinds and enhance shareholder returns in the long run.
With dividend-paying stocks, investors will want companies that have the strong balance sheets and cash flows needed to provide steady payments to shareholders. Analysts can dig through these details and identify stocks that could boost returns through dividends and price appreciation.  

Keeping that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

EOG Resources

Crude oil and natural gas exploration and production company EOG Resources (EOG) is first on this week’s list. On Nov. 2, EOG reported market-beating third-quarter results. It also announced a 10% increase in its regular quarterly dividend to 91 cents per share and a special dividend of $1.50 per share.
Additionally, EOG increased its cash return commitment from 2024 onwards to a minimum of 70% of annual free cash flow from the previous target of at least 60%. Considering just the regular dividends, EOG’s dividend yield stands at 2.9%.
Following the print, Siebert Williams Shank analyst Gabriele Sorbara reiterated a buy rating on EOG with a price target of $172, citing the company’s “blowout quarter” that exceeded expectations across all metrics. Commenting on the subdued Q4 2023 guidance, the analyst reminded investors that EOG has a long track record of beating its guidance on production, capital expenditure and costs.
The analyst noted the hike in EOG’s cash returns commitment and also pointed out that this year’s total cash returns (dividends plus share buybacks) are tracking at $4.1 billion, representing about 75% of its estimated FCF of $5.5 billion.      

“We maintain our Buy rating on its track record of execution and shareholder returns with its cash rich balance sheet (~$5.33 billion) providing differentiation and optionality,” said Sorbara.
Sorbara holds the 434th position among more than 8,600 analysts on TipRanks. The analyst’s ratings have been successful 46% of the time, with each rating delivering an average return of 10.9%. (See EOG Resources Financial Statements on TipRanks). 

Coterra Energy

Another energy player, Coterra Energy (CTRA), recently announced better-than-anticipated third-quarter earnings. The company raised its 2023 production guidance, driven by faster cycle times and strong well productivity.
In Q3 2023, Coterra returned $211 million to shareholders, including $151 million via dividends and $60 million through share repurchases. Overall, the company’s year-to-date shareholder return of $839 million represents 91% of its free cash flow.
Management reiterated its commitment to return over 50% of its annual free cash flow to shareholders through its annual regular dividend of 80 cents per share and share repurchases. Based on just the regular dividend, CTRA offers a dividend yield of about 3%.  
Mizuho analyst Nitin Kumar, who ranks No. 124 out of more than 8,600 analysts on TipRanks, thinks that in a quarter where several exploration and production companies have attributed their strong volumes to improving operating efficiencies, CTRA still stands out in his opinion as its beat-and-raise performance was driven by both well timing and productivity.
Further, he highlighted that the company raised its 2023 oil production outlook by 3% compared to peers who increased their guidance by about zero to 1%, on average.
Kumar reiterated a buy rating on CTRA stock with a price target of $42 and designated it a top pick, noting, “CTRA returned ~84% of 3Q23 FCF via its dividend and buybacks, and is on track to return ~80% of 2023 FCF (vs. target of 50%+).”
Kumar’s ratings have been profitable 63% of the time, with each delivering an average return of 17%. (See CTRA Technical Analysis on TipRanks)

Crescent Energy

Kumar is also bullish on another dividend stock: Crescent Energy (CRGY), an independent energy company that develops and operates oil and natural gas properties. On Nov. 6, the company announced its third-quarter results and declared a quarterly dividend of 12 cents per share, payable on Dec. 4. CRGY offers a dividend yield of 4.6%.  
Commenting on the third-quarter results, Kumar said that CRGY reported an oil-driven production and EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expense) beat, with lower capital expenditure.
Kumar noted that following Crescent’s two Western Eagle Ford acquisitions, the company is already displaying impressive capital efficiency improvements, realizing about 20% drilling and completions well cost savings compared to the prior operator. This suggests an incrementally better 2024 outlook compared to the company’s preliminary soft forecast, the analyst said.  
“Moreover, the company is further demonstrating it can deliver on its acquisition-driven model in the public market arena, which should give investors additional confidence in the strategy,” said Kumar.
In line with his bullish stance, Kumar reiterated a buy rating on CRGY with a price target of $19. (See CRGY Insider Trading Activity on TipRanks)

Diamondback Energy

Diamondback Energy (FANG) is an oil and natural gas company focused on assets in the Permian Basin in West Texas. On Nov. 6, it delivered better-than-projected third-quarter results. Also, the company announced a base dividend of 84 cents per share and a variable cash dividend of $2.53 per share, both payable on Nov. 24.
Diamondback said that the base and variable dividends combined indicate an annualized yield of more than 8%. It is worth noting that FANG also enhanced shareholder returns through share repurchases worth $56 million in Q3 2023.  
In reaction to the results and dividend announcement, RBC Capital analyst Scott Hanold said that Diamondback’s execution remains strong. He added that the company’s shareholder return strategy is differentiated, noting, “FANG quickly pivoted to higher levels of dividends, but was still able to execute buybacks and among the lowest relative points during the last quarter.”
The analyst noted that the company repurchased shares worth $1.9 billion at an average 6% discount to market prices since the start of 2022. He pointed out FANG’s discipline to purchase shares only during periods of significant price disconnects from the stock’s intrinsic value.
Hanold maintained a buy rating on FANG stock and raised the price target to $175 from $170 to reflect stronger free cash flow and stock buybacks executed at accretive value point. He ranks No. 16 among more than 8,600 analysts on TipRanks. His ratings have been successful 64% of the time, with each rating delivering an average return of 24.4%. (See Diamondback Hedge Fund Trading Activity on TipRanks)

Starbucks

Finally, there is coffee chain Starbucks (SBUX), which impressed investors with its fiscal fourth-quarter beats earlier this month. The demand for the company’s pricier beverages and higher traffic in the domestic market boosted its quarterly performance.  
The company also announced its long-term strategy called “Triple Shot Reinvention with Two Pumps,” which will focus on elevating the brand, bolstering and scaling digital presence, and expanding globally, while unlocking efficiency and reinvigorating partner culture.
Coming to shareholder returns, in September, Starbucks announced a 7.5% rise in its quarterly dividend to 57 cents per share, payable on Nov. 24. Starbucks initiated its dividend payments in 2010 and has increased its dividend for 13 straight years at a compound annual growth rate of about 20%. SBUX offers a dividend yield of 2.2%.
Following the fiscal Q4 results and updates on the long-term strategy, BTIG analyst Peter Saleh reiterated a buy rating on SBUX with a price target of $125. The analyst highlighted the company’s better-than-anticipated global same-store sales growth of 8% in fiscal Q4 and noted that traffic gains and solid operating margin fueled the earnings beat.
“We believe Starbucks has a compelling return profile as its unfolding sales and economic recovery is matched by continued global unit development and stronger shareholder return targets,” said Saleh.  
Saleh ranks No. 504 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, with each delivering an average return of 9.10%. (See Starbucks’ Stock Charts on TipRanks) More

Nearly 4 in 5 Americans say they’re trying to improve their credit score, according to a recent NerdWallet survey.
But 50% say they face barriers toward improvement, namely a low credit limit.
“As long as you hit that good-to-excellent range, doors will open,” said Sara Rathner, a credit card expert at NerdWallet.

Solstock | E+ | Getty Images

A great credit score can be important, but improving that number isn’t always easy.
Nearly 4 in 5 Americans say they’re trying to improve their credit score, according to a recent NerdWallet survey. But 50% say they face barriers toward improvement, namely a low credit limit. The website polled more than 2,000 adults in the U.S. in September.

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Increasing your credit score can grant you greater access to new opportunities, such as the ability to rent an apartment or buy a home, or get utilities, experts say. (In some instances, those entities may look at your credit report rather than your score.)
“As long as you hit that good-to-excellent range, doors will open,” said Sara Rathner, a credit cards expert at NerdWallet.

‘Utilization can definitely affect your credit in a big way’

Among cardholders trying to improve their credit score, 15% say that having a low credit limit is a roadblock, according to NerdWallet’s report.
One of the factors that goes into calculating your credit score is credit utilization, or the percentage of the total available credit that you use in any given month, said Rathner. A low credit limit means even small purchases can result in high utilization.
“Credit utilization can definitely affect your credit in a big way,” said Ted Rossman, credit card specialist and senior industry analyst at Bankrate. 

For instance, if you have a $1,000 credit limit, and you spend $500 a month on that credit line, your credit utilization is 50%. 
A rule of thumb is that you should have a credit utilization of 30% or lower, but that can be hard to achieve when you have a low credit limit, Rathner said.
If you have that $1,000 credit limit, $300 doesn’t go that far, she said: “That’s a few grocery bills right there.”
There are ways for you to increase a credit line: First, you can ask your credit card issuer and see if you’re eligible for a boost, Rathner said.
If your income has increased, update your account with your current salary; it could “make you eligible for a credit limit increase,” she added.

Some experts also recommend paying your balance ahead of your statement closing date, because that’s when the lender reports your balance to the credit bureaus.
“Make an extra mid-month payment; knock that statement balance down before it even comes out,” said Rossman. “That will help your utilization ratio, but it also helps if you’re carrying debt.”
Applying for a new card can increase your available credit overall; while doing so slightly lowers your score, that drop is only temporary. 
Yet, sometimes “it’s easier said than done to get a new credit card or get a higher limit,” Rossman said.

Many worry they’ll hurt their score in the next year

Despite those wins, 58% of Americans are worried they’ll hurt their credit score in the next 12 months, the NerdWallet survey found.
“Makes me wonder what are people planning on doing with their credit,” said Rathner, “or is it because … they’ve been hurt in the past and that fear is being carried forward.”
Amid high inflation and interest rates, people are falling delinquent on credit card payments as well as more subprime auto delinquencies, said Rossman. In the NerdWallet survey, 14% of respondents say not being able to make debt payments is a roadblock to improving their score, while 13% point to not being able to make credit card or loan payments on time as an impediment.
“When people say they’re afraid their score is going to go down, it’s probably because they’re worried about their finances, they feel like they’re going to pay late, or they have more debt than they are comfortable with,” he said.

About 28% of respondents fear they will hurt their score by taking on too much debt and 24% worry about missing a credit card payment, NerdWallet found.
While there are misconceptions as to how credit scores are calculated and variations among multiple scores, it’s helpful to remember cardholders have some agency, Rathner said.
“It’s very tempting to turn your credit score into some sort of score for how you are doing as a person, as an adult,” said Rathner. “If you’re struggling with a low credit score, it’s not because you’re a bad person, it’s because your situation has been tough.” More

By nearly every measure, Americans are financially strained. Yet we’re bombarded by messages to “buy more and more and more,” personal stylist Allison Bornstein says.
On the heels of her viral three-word method and wrong shoe theory, Bornstein has a radical, new idea: “Just because you have the money doesn’t mean you have to spend it.”
Heading into the holidays, here’s how to avoid the temptation to overspend.

Allison Bornstein, author of “Wear It Well”.
Photo: Jennifer Trahan

It’s not often we’re told to buy less, at least on social media.
More likely, we’re encouraged to wear Loro Piana cashmere baseball hats and carry $300 Smythson notebooks like Gwyneth Paltrow in the name of “quiet luxury” and justify such expensive purchases using “girl math.”

That’s in addition to the current “treat” culture trend, which promotes spending money on smaller splurges such as at Starbucks as a form of self-care.
“We don’t need half of these things,” said Allison Bornstein, a celebrity stylist and author of the new book “Wear It Well: Reclaim Your Closet and Rediscover the Joy of Getting Dressed.”
“Take a second to pause,” she said.

Actress Gwyneth Paltrow exits a courtroom in which she is accused in a lawsuit of crashing into Terry Sanderson during a 2016 family ski vacation, Park City, Utah, March 21, 2023.
Rick Bowmer | Afp | Getty Images

By nearly every measure, Americans are financially strained. And yet, we’re bombarded by messages to “buy more and more and more,” Bornstein said.
Bornstein, who has been a style consultant for more than 13 years, encourages her clients to work with what they already own. “It’s just easier to buy something new, but you can use what you have,” she said.  

“You can be more creative and more interesting and so much more economical.”
More from Personal Finance:Quiet luxury may be Americans’ most expensive trend to dateShoppers embrace ‘girl math’ to justify luxury purchasesPaying in cash helps shoppers ‘forget’ guilty pleasures
While some things may be worth the splurge, such as a good coat or expert tailoring, “just because you have the money doesn’t mean you have to spend it,” Bornstein writes in “Wear It Well.”
With her viral three-word method for defining a personal style and wrong shoe theory to shake up the usual combinations, there’s a reason her ideas are resonating, and some of it is due to spending fatigue. “People are tired and left with a pile full of stuff we’ve been told to buy and don’t know what to do with,” she said.

Arrows pointing outwards

Allison Bornstein’s book: “Wear It Well”.
Courtesy: Allison Bornstein

How to avoid overspending

Quiet the noise altogether, cautions consumer-savings expert Andrea Woroch. “The most simple way to dodge temptations is to get off the list by unsubscribing from emails, opting out of text alerts, turning off push notifications in retail apps and unfollowing brands on social,” she said.
In addition, deleting payment details stored online helps create a “purchase hurdle” that forces you to think through your buying decisions, Woroch said.

Otherwise, sleep on it, both Woroch and Bornstein advise. Bornstein recommends adding an item to a wish list before committing to a purchase, and resisting the urge to buy something just because it is on sale.  
“If you didn’t want something when it was full price, you probably don’t want it discounted,” Bornstein writes in her book. “Think of a sale as a bonus,” she said. “When the item you already know that you want is on sale, it’s that much sweeter.”
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A pedestrian passes a Wall Street subway station near the New York Stock Exchange (NYSE) in New York, U.S., on Monday, June 27, 2022. Money managers betting on a sustained global rebound will be left sorely disappointed in the second half of this crushing year as a protracted bear market looms, even if inflation cools. Photographer: Michael Nagle/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images

With the importance of socially responsible investing strategies increasingly ubiquitous, advocates are turning their attention to an area they see as less understood.
The social pillar of the environmental, social and corporate governance investing framework — known as ESG in short — has been dubbed the “middle child” largely due to data challenges. As ESG has reached new heights in terms of broad awareness on Wall Street and Main Street, those in the space now see an opportunity to better define and quantify the “S” pillar. 

“There’s been quite a bit of growth,” said Michael Young, director of education and programs at the Sustainable Institute Forum. “But amongst the three, it’s definitely sort of the latest to be included in an investment process. And not everybody will use it the same way.”
For years, the social pillar has been considered relatively nebulous and hard to quantify. BNP Paribas found in 2021 that more than half of the 350 institutional investors around the globe surveyed believed the “S” was the most difficult to analyze and integrate.
At the same time, the climate and corporate leadership themes have garnered growing interest. That came in part as climate change and racial justice have gained more awareness in recent years, pushing investors and company leadership to pay more attention to how corporations perform in these categories. And it comes despite the fact that the ESG investing framework has found itself in hot water politically.
Now, investors are left trying to understand what the “S” means to them and how best to analyze corporate efforts in the space.

Defining and quantifying the ‘S’

The elevator-pitch definition for the social pillar usually goes something like this: It’s how companies interact with their communities, both in terms of their work forces and the locations their business operates in.

While data around human capital and diversity has improved over the past several years, investing professionals still see a lack of standardized information that can make social themes harder to integrate. The patchwork of data can also make apples-to-apples comparisons between competing companies more difficult.
Looking ahead, Young said a potential human capital disclosure rule from the Securities and Exchange Commission is being watched by advocates. They’re hoping the rule will lead to a database of information from companies given to the Equal Employment Opportunity Commission made publicly available.
“That would be a huge catalyst,” he said. “It would be the very first ‘S’ disclosure rule in the United States.”
In the absence of enough standardized data, some have gotten creative.
Marian Macindoe, head of ESG stewardship at Parnassus Investments, said data on the share of part-time versus full-time workers, benefits for contract workers and evidence of hiring best-practices are all things to consider. She said Parnassus will often ask for engagement data from companies, while admitting it is an imperfect way to measure performance.
When looking for information on a company, her team will check for publicly available fines or lawsuits against a company. Even reviews on Glassdoor or memes posted to social media platforms that touch on common themes can offer user insights, she said.
The firm wants companies to know: “This stuff matters – and you should be held accountable for it,” she said.
Harbor Capital and Irrational Capital partnered to build exchange-traded funds centered thematically on employee satisfaction: They include the Harbor Human Capital Factor US Large Cap ETF and the Harbor Corporate Culture Small Cap ETF.
Fittingly, the funds trade under a variety of tickers — like HAPI and HAPS — that use the same first three letters as the word “happy.”

Stock chart icon

The large-cap vs. small-cap fund this year

The funds use data collected by Irrational of more than 15 million employees across several thousand companies. That useful because the firm believes that strong employer-employee relationships can drive better business performance and, thus, boost shares.
Big technology names such as Microsoft, Apple, Alphabet and Meta were some of the biggest positions in the large-cap fund as of mid November. Meanwhile, Insperity, H.B. Fuller, Apple Hospitality and Evercore are among the biggest holdings in the small-cap version.
Elsewhere, socially responsible investors see companies’ roles in the communities they operate in as part of the “S.” Macindoe said companies can sometimes mistake this for just doing charity work rather than being active members of the community.
“Charitable contributions and philanthropy are really great, but that’s not the ‘S’ of ESG,” she said. “The ‘S’ in ESG is about taking care of the people that rely on you and that you rely on when you plan your business strategy and operations.”
There can also be overlap between environment and social themes that can sometimes drive confusion, according to Yijia Chen, vice president at Calvert Research and Management, a firm that was an early proponent of socially responsible investing. In these cases, she said the social pillar comes into play in ensuring a carbon transition is equitable and just.

A fraught environment

Globally, it appears social themes will become more clear and important to investors over time. 

This year, BNP Paribas found investors around the globe said that a company’s commitment to workers’ issues would become more of a priority when proxy voting or making investment decisions in the next two years. (BNP Paribas specifically gauged topics like fair pay and equal treatment. The firm also asked about how investors view the importance of a company uplifting of diversity, equity and inclusion efforts, known in short as DEI, in the workplace.)
But North American investors showed a reverse trend, with the survey finding these issues will lose priority over the next two years. That comes as ESG and DEI have become politically divisive and spurred debate among lawmakers over the past year.
Meanwhile, backlash toward Target’s Pride collection and Anheuser-Busch’s Bud Light campaign with a transgender influencer have become symbols of how these so-called culture wars have bled into corporate America. RBC Capital Markets found that U.S. corporations have increasingly turned to terms like sustainability rather than ESG when discussing social responsibility on earnings calls.
While the ESG landscape has grown politically fraught, some investors caution against reactionary moves like divestment when they don’t see a company living up to socially responsible values.
Instead, they argue they can make a better impact by using their power as active investors to advocate for better policies. Many point to materiality and risk reduction as recurring reasons they bring up to companies for why they should care about ESG issues.
Han Yik, a senior advisor for the New York State Teachers’ Retirement System pension, told attendees of an ESG conference last month to think about the decision to divest like how to handle trash in a backyard. The trash can be moved to a neighbor’s yard, or can be dealt with for the betterment of all.
“We’re not a fan of divestment,” Yik said. “We think that we can have more influence as owners of the companies than if we were to sell them to someone else.”
Though ESG experts contend with data challenges and broader confusion around the social pillar, they say its importance shouldn’t be a particularly hard sell.
“If you’re a business and you don’t take care of the natural human capital in which your business relies, you will not be successful in the long term,” Macindoe said. “It’s just about scanning your landscape and making sure that you’re going to thrive in it for the long term.” More

Renown short seller Jim Chanos is converting his hedge fund to a family office.
He will no longer be running a limited partnership or an offshore fund, and he will be returning external capital to investors, CNBC has learned.
The move occurs as the S&P 500 is up nearly 18% year to date and has gained more than 7% in November alone.

Jim Chanos, Chanos & Company, at CNBC’s Delivering Alpha, Sept. 28, 2022.
Scott Mlyn | CNBC

Renown short seller Jim Chanos will be converting his hedge fund Chanos & Co., to a family office and advisory business, CNBC has learned.
The investor, best known for his bet against Enron before its bankruptcy in 2001, will no longer be running a limited partnership or an offshore fund and will be returning the external capital to investors, Chanos told CNBC’s Scott Wapner.

Assets managed by Chanos & Co. have come down significantly, declining to a level below $200 million, compared to $6 billion in 2008, according to The Wall Street Journal, which first reported on the short seller’s move.
Chanos is moving to the family office model as the stock market has rallied in 2023. The S&P 500 is up nearly 18%, and the broad-market index is on pace for a 7.6% gain in November.
Chanos is notable for shorting Enron a year before its collapse. As recently as January of this year, he also had short bets on Tesla, pointing to rising competition in the electric vehicle market. At the time, he noted that China is the weakest market for the EV maker.
“You have repatriation of capital risk. You have [Chinese automaker] BYD and others just taking massive market share,” Chanos said. “Tesla trades at a premium to those companies who are growing faster than they are in China. So if you want to play all these things, there are now lots of ways to do it.”
Indeed, throughout 2023, Tesla made price cuts on its S and X models in China, and it rolled out lower cost versions of the vehicles in the U.S. as competitors ramped up in the EV market.

Still, Tesla shares have rallied 90% this year as investors crowded into the so-called Magnificent 7 tech stocks.

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Tesla, year-to-date

Stocks have rallied forcefully in November on the hope that the Federal Reserve will start cutting interest rates in 2024.
Chanos told CNBC last year that investors shouldn’t count on the Federal Reserve to always bail them out.
“The idea of a Fed put and that the Fed is always going to be there to bail out my bad investment decisions is really not cogent investment policy to hold onto for a long time,” Chanos told CNBC’s “Halftime Report” in January 2022.
-CNBC’s Yun Li contributed reporting. More

Year-end Planning

If you own cryptocurrency for more than one year, you qualify for long-term capital gains tax rates of 0%, 15% or 20%.
In 2023, single filers can earn up to $44,625 in taxable income — $89,250 for married couples filing jointly — and still pay 0% for long-term capital gains.
This could be a chance to harvest crypto gains or sell and immediately repurchase for a “step up in basis,” experts say.

After a more than 80% jump in bitcoin’s price in the first half of 2023, crypto market watchers gave CNBC their expectations for how the cryptocurrency will perform in the latter half of the year.
STR | NurPhoto via Getty Images

As investors weigh year-end tax moves, there may be a lesser-known savings opportunity for certain cryptocurrency investors, experts say.
After the crypto industry lost nearly $1.4 trillion in 2022, many investors leveraged tax loss harvesting, which uses losses to offset profits. But after a rally in 2023, you may consider strategically selling profitable crypto held in brokerage accounts, known as “tax gain harvesting.”

The strategy works for investors in the 0% long-term capital gains bracket who have owned digital assets for more than one year, according to certified public accountant Tom Wheelwright, CEO of WealthAbility.

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As of November 17, the price of bitcoin has more than doubled since the beginning of 2023, and some investors now have “built-in gains,” Wheelwright said.
Those in the 0% long-term capital gains bracket can “sell it, recognize the gain and buy it back immediately” because there’s no so-called wash sale rule for gains, he said.
You calculate gains by subtracting the asset’s sales price from the “basis” or original cost. But when you repurchase the currency, the basis adjusts to the new purchase price, known as a “step-up in basis.”
If prices continue to climb and you sell the asset again later, the higher basis means future profits will be smaller.

Investors “really ought to be paying attention” to tax-free opportunities to harvest crypto gains, according to Wheelwright. Of course, the decision to repurchase crypto depends on your risk tolerance and goals.

Why it’s a ‘wiser strategy’ to harvest gains

If you fall into the 0% bracket, crypto tax-gain harvesting is a “wiser strategy” than harvesting losses, especially when immediately buying back the asset, explained Andrew Gordon, tax attorney, CPA and president of Gordon Law Group.
Tax-loss harvesting has been popular among crypto investors because of a wash sale loophole. The IRS disallows a loss for other assets if investors buy a “substantially identical” asset within the 30-day window before or after the sale. The wash sale rule doesn’t apply to crypto losses or gains for any asset.
Still, the tax gain strategy allows you to sell at a gain and pay no tax, whereas “tax loss harvesting defers future tax,” Gordon said.

How to know your capital gains bracket

For 2023, you may fall into the 0% long-term capital gains rate with taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing jointly.
That’s based on “taxable income,” which is significantly lower than gross earnings. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

For example, if your 2023 salary is $60,000 and you make $5,000 in pre-tax 401(k) contributions, that brings your W-2 earnings to $55,000. Your taxable income could still fall below $44,625 after subtracting the $13,850 standard deduction for single filers.
The 0% long-term capital gains brackets are even higher for 2024, with taxable income of $47,025 or less for single filers and $94,050 or less for married couples filing jointly. More

It’s almost peak engagement season for couples in the U.S.
Consumers on the market for a diamond engagement ring should look at a few considerations on what sort of jewels to invest in: either lab-grown or natural diamonds.
While shoppers should keep in mind that traditional mined diamonds are not a practical purchase, their supply may soon start to dwindle, said New York-based Paul Zimnisky, a financial and diamond industry analyst.

Engaged couple embrace.
Bryan Miguel | Moment | Getty Images

Holiday gifts aren’t the only pricey thing on shoppers’ lists right now.
We’re also approaching peak engagement season for couples in the U.S., or the time between Thanksgiving and Valentine’s Day, according to wedding site The Knot.

Consumers in the market for a diamond engagement ring have an early decision to make: Whether to pick lab-grown or natural diamonds.
While shoppers should keep in mind that traditional mined diamonds are not a practical purchase, their supply may soon start to dwindle, said Paul Zimnisky, a financial and diamond industry analyst based in New York City.
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“People don’t buy them because they’re cheap; they buy them because it makes them feel good, it’s an emotional purchase, a financial sacrifice,” he said.

The rise of lab-grown diamonds

Global sales for lab-grown diamonds increased to $12 billion in 2022, up 38% year over year, per an analysis by Zimnisky.

Ring shoppers often opt for these gems — created by subjecting pure carbon to extremely high heat and pressurization by machine — over mined diamonds because they are visibly and chemically identical but cost way less, as well for ethical purposes.
“There’s a lot of consumers that would love to buy diamond jewelry but maybe cannot afford it at $1,000 price points but can afford it at $100 price points,” Zimnisky said.
However, unlike natural diamonds, lab-grown stones don’t increase in value at all.
“It’s very difficult to resell a lab diamond, and as the price gets lower, I don’t think there’s going to be a resale market for lab diamonds,” Zimnisky said.

Natural diamonds were ‘a winner’ during the pandemic

Man proposing to his girlfriend on Christmas Eve.
Martin-dm | E+ | Getty Images

During the Covid-19 pandemic, experts say, some consumers used savings from federal stimulus money on hard luxury goods like diamonds as travel and dining were still restricted due to lockdowns and other regulations.
“Diamonds were kind of a winner during the pandemic,” Zimnisky said.
The pandemic brought on a different challenge for natural diamonds: a sharp decline in dating, leading to a drop in engagements.
Engagements typically occur within three years of a first date, per Signet Jewelers, the largest diamond conglomerate in the U.S. and parent company of retailers Kay Jewelers and Zales.
As fewer couples went out on dates in 2020, fewer got engaged in the last two years, according to data from Signet Jewelers. However, the company expects engagements to rebound in the coming years.
“We will see a material uptick in engagements and weddings in the coming years,” said Zimnisky, as the wedding industry’s the cyclicality impacts the demand for natural diamonds.
Shoppers will also need to consider that the supply of natural diamonds is declining as the world runs out of resources, he added.
“We’re going to continue to see supply contracting and I don’t think demand for natural diamonds is going to go away anytime soon,” Zimnisky said.
As the price for natural diamonds remains relatively low compared to the last decade, now may be “the best time to buy a natural diamond,” he said, as prices may spike from mid-2024 onwards.

‘Lab diamonds will be their own market’

The man-made diamond market is forecasted to reach $18 billion in total value by 2024. But as prices for man-made diamonds continue to decline, the industry is going to attract a different consumer.
Man-made diamonds might come to be considered “costume jewelry” in the future, said Benjamin Khordipour, manager of Estate Diamond Jewelry in New York.
“Lab diamonds will be their own market and there’s going to be consumers who buy those for different circumstances,” said Zimnisky. “People looking to buy an engagement ring or a piece of fine jewelry are going to continue to want natural diamonds.”

If you opt for a lab-grown diamond, go into the store with the expectation that it — unlike a mined diamond — probably won’t have any resale value.
“I know most consumers aren’t thinking about that when they’re getting an engagement ring, but that’s just the big takeaway,” Zimnisky said.
On the other hand, if you’re planning on investing in a natural diamond, be very realistic with your budget, Khordipour said. Come to a realistic price point you can afford with your lifestyle.
While financing options such as wedding loans exist, it may be in your best interest to avoid going into heavy debt for a ring, he said.
If you don’t have enough savings for the ideal ring, adjust to something smaller and upgrade to a grander gesture in 10 years, Khordipour suggested.
In the end, make sure you have the discussion with your loved one and come to an agreement that makes the most sense for your preferences and financial goals. More