As we head into the holiday season, it is a good time to review your investment portfolio and take steps to protect yourself from the growing number of financial scams targeting consumers.
First, review your overall portfolio. Does it still align with your investment objectives and risk tolerance? If you’re the type of investor who prefers a “set it and forget it” approach, your portfolio may have drifted away from its intended asset allocation due to recent market performance. Year to date, the S&P 500 is up 11.6% through Oct. 16, or up almost 15% in the past year.
Always make any changes in your retirement accounts (401k, IRA) first since these changes will have no immediate tax consequences. Make further adjustments in your taxable investment accounts (individual, joint, trusts, etc.). If you sell an investment in your taxable brokerage account, chances are you will have capital gain income. If you have any losses, they may offset the gains. If you have capital gains and owe taxes, that is a good problem because it means you made money. The long-term capital gains rates for 2026 are based on your taxable income. The rate is zero if you are single with taxable income up to $49,450 or married filing jointly with a taxable income up to $98,900. The rate is 15% for single filers with income up to $545,500 single and $613,700 if married. It is 20% for those with taxable income over those amounts and high-wage earners may also incur an additional 3.8% tax. I recommend sitting down with your financial adviser or CPA prior to year-end to discuss all your tax moves.
Second, you must be vigilant to protect yourself against all the scams out there. In 2025, according to the official Federal Trade Commission reports, Americans lost approximately $15.9 billion, a 27% increase from the prior year. Consumer agency groups like the Consumer Federation of America (CFA) estimate the actual cost to be as high as $148 billion, since most scam victims never file a police report. Over half of all reported scams involve crypto, driven by fake investment scams. Those over 60 are generally the hardest-hit group. Unfortunately, many families have been affected by financial scams, either directly or through someone they know.
Common scams include pig butchering, romance scams, tech support scams, grandparent scams, government impersonation scams, home repair scams, phishing attacks, and Ponzi schemes.
Pig butchering (financial grooming) is a combination of romance scam and crypto investment fraud. The term “pig butchering” is derived from the practice of fattening pigs before the slaughter (my apologies to the vegans out there). Pig butchering scams fatten their victims with false attention and then exploit them financially.
The first step is to groom the victim through text messaging, a dating app, or social media. Once the connection is made, they request to take the conversation offline to a messaging platform like WhatsApp or WeChat. Private messaging platforms are harder to trace. This may go on over months to gain trust.
Once they gain trust by communicating regularly, the scammers propose an investment opportunity related to crypto. They will offer to train the victim on how to set up an account on an exchange to purchase crypto. They walk them through how to convert cash into crypto, using known exchanges, ATMs, or digital wallets. Next the funds are transferred to a fraudulent platform. The fake platforms mimic a legitimate trading site displaying fake gains to keep the person hooked while encouraging more deposits. Once this happens it is over, since the victim can make deposits but not withdrawals. At that point, victims often discover that withdrawals are impossible, and their funds have disappeared.
In September, the AARP discussed a scam where Dennis, age 82, met Jessie on Facebook. After months of communication, Dennis developed what he believed was a genuine relationship and trusted her recommendations. He told his son on a family vacation that he was exploring a major cryptocurrency investment opportunity. Both the investment and the relationship were frauds. Dennis lost his life savings.
The romance scam is highly manipulative and isolates the elderly victim, who desires companionship. Many times, they are widows and widowers. The crooks use dating sites and social media to create fake profiles. Once a connection is made, the crook will build a relationship over time and eventually convince them to send them money. I was speaking with someone recently who explained that his father fell for an Army major stationed in Europe. She told him that she was going to retire in the next year and could not wait to be with him. His dad was sending small amounts of money initially to help her out. Once the hook was set, she explained there was an opportunity for her to buy a home and he offered to help. She said she would reimburse him once she retired. It was a scam and the money was gone. Like many victims of romance scams, he was seeking companionship and believed he had found his soulmate.
Tech support scams have been around for a while. The tech company will request remote access to your computer to solve the problem. Once they gain access to your computer, they may steal personal information, passwords, or financial data.
The grandparent scam is also not new. According to the FTC, the scam starts with the crooks impersonating a relative or someone pretending to act on behalf of the family member. Advances in artificial intelligence now allow scammers to convincingly mimic the voices of family members. The impersonator will say there is an emergency or that they have been arrested and need immediate assistance. The victim is then told to provide payment in the form of cash, wire transfer, or gift card. Once the money is paid, it is gone. If you ever get a call like this, please do not act. Take down the information on how to make the payment, hang up, and call your family member. Chances are your loved one is safe.
Government scams have also been around for a while. As a rule, government agencies such as the IRS or Social Security Administration initiate most official communications through the mail and do not demand immediate payment by phone. One of our clients recently visited our office after receiving a phone call from someone claiming to represent the IRS. If she could wire the money that day, the IRS would not charge her interest and penalties. I let her know it was a scam and had her report it to the authorities.
The best defense against fraud is a healthy dose of skepticism. As your parents and grandparents probably told you, if something seems too good to be true, it probably is. Don’t feel embarrassed if you become involved in any type of scam. Instead, report it to your local police department and file a police report. You can also file a complaint with the FBI’s Internet Crime Complaint Center at www.ic3.gov . Reporting suspicious activity not only assists investigators but may also help prevent others from becoming victims.
As we enter the holiday season, I wish you peace, happiness, and meaningful time with family and friends. May your Christmas, Hanukkah, or other holiday celebrations be filled with joy, and may 2027 bring you good health, happiness, and prosperity.
Fred Dunbar, CLU®, ChFC®, RFC®, AIF®, is the former President of Common Cents Planning. Fred’s team may be contacted at 610-361-0865, by e-mail at info@commoncentsplanning.com or by mail at 239 Baltimore Pike, Glen Mills, PA, 19342. Investment advisory services offered through Planning Directions, Inc., d/b/a Common Cents Planning a Registered Investment Adviser. Fixed insurance products and services are separate from and unrelated to Common Cents Planning.
This commentary is meant for general informational purposes only and is not intended to be a substitute for professional financial, tax or legal advice. Investing involves risks including the potential loss of principal. Past performance is no guarantee of future results. All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results.
