Weekly Market Notes – April 12, 2021

For the Week of April 12, 2021

THE MARKETS

Despite an unexpected jump in jobless claims, stocks rose Friday amid the accelerating vaccine rollout and reopening optimism. Both the Dow and the S&P hit record closing highs. For the week, the Dow rose 1.99 percent to close at 33,800.60. The S&P gained 2.76 percent to finish at 4,128.80, and the NASDAQ climbed 3.13 percent to end the week at 13,900.19.

Returns Through 4/09/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.9911.0245.5714.7316.70
NASDAQ Composite (TR)3.138.0571.8227.2324.73
S&P 500 (TR)2.7610.3950.5018.7017.33
Barclays US Agg Bond (TR)0.40-2.900.374.843.14
MSCI EAFE (TR)1.806.0943.856.559.72
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

They’re Buying Bonds — The Fed is buying $120 billion of bonds each month – $80 billion of Treasury debt and $40 billion of mortgage-backed securities. On March 31, the Fed confirmed the purchases will continue “until substantial further progress has been made toward the committee’s maximum employment and price stability goals.” (source: Federal Reserve, BTN Research).

Lowest Paid, Hardest Hit — 82 percent of the net job losses in the United States in 2020 were suffered by workers in the bottom 25 percent of wage earners (source: Economic Policy Institute, BTN Research).

Wealthiest — The top 10 percent of U.S. households (as measured by net worth) own 70 percent of all assets nationwide as of Dec. 31, 2020, i.e., $85.6 trillion out of $122.9 trillion. The bottom 50 percent of U.S. households own just 2 percent of all assets as of Dec. 31, 2020, i.e., $2.5 trillion out of $122.9 trillion (source: Federal Reserve, BTN Research).

WEEKY FOCUS – What You May Not Know About Estate Taxes

You have worked hard, managed your finances well, and invested wisely to protect your future and care for your family. It’s crucial not to lessen your vigilance when it comes to your estate. Unfortunately, the Tax Cuts and Jobs Act (TCJA) passed in 2017 has lulled some individuals into a false sense of security.

In 2021, a person’s estate is exempt from federal taxes as long as it is under $11.7 million. (The amount over the exemption can be taxed at up to 40 percent.) But the current exemption, which doubled under TCJA, is set to expire in 2026 barring further legislation. And the Biden administration has already proposed cutting much of the estate tax exemption.

Even estates well within the federal exemption may still be impacted by state death taxes. In 2021, Washington, Oregon, Minnesota, Illinois, Maryland, Vermont, Connecticut, New York, Rhode Island, Massachusetts, Maine, Hawaii, and Washington, D.C., all levy estate taxes on estates above $1 to $5.9 million. Among the list, the highest estate tax rates vary from 12 to 20 percent.

Another six states levy an inheritance tax: Nebraska, Iowa, Kentucky, Pennsylvania, Maryland, and New Jersey. The states’ highest inheritance tax rates vary from 10 percent (Maryland) to 18 percent (Nebraska). All six states exempt spouses from paying inheritance tax; some extend at least a partial exemption to immediate relatives.

Although some states reduced or eliminated estate tax burdens to retain wealthy residents over the past decade, pandemic-related budget woes may reverse that trend. For example, the District of Columbia reduced its estate exemption from $5.67 million in 2020 to $4 million in 2021. And a taxable $10 million estate could owe nearly $1 million in estate tax to D.C.

There may be ways to reduce an estate’s taxes or fees: various types of trusts; transferring assets into a Limited Liability Company or Family Limited Partnership; gifting assets; putting money into a life insurance policy; even moving to another state. Estate planning can be complex, and it’s crucial to get it right. We would be happy to work with you, your attorney and tax professional to find solutions for your situation.  We do not provide tax or legal advice; please consult an accountant or attorney for more information.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright April 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3543659.1 

April 2021 Monthly Outlook – Reasonable Man

“The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself.”

The first quarter of 2021 was a positive one for the equity markets, while the fixed income markets saw declines due to a spike in interest rates. Like an ocean, which can look relatively calm on the surface but with significant undercurrents happening below, within the equity market, we saw a sizeable shift from “stay at home” stocks, which drove the market in 2020, into more “opening up” stocks.  The same was true in fixed income, where highly rated government and corporate bonds declined more than lower quality and floating rate bonds.

We saw similar trends during late 2020 and early 2021, only to see them quickly reverse when new covid-induced lockdowns slowed the re-opening process.  With vaccinations rising rapidly and warmer weather ahead, we are now more confident the trends under the surface will be more sustainable.  As such, we have been adjusting portfolios accordingly. One potential headwind is the risk of rising inflation.  We are already seeing the bond market price in higher inflation via the rise in interest rates.  Measures of prices on goods is clearly showing higher prices in a number of categories.  There is a great deal of pent up demand in the economy, with consumers flush with cash from government stimulus payments and a strong desire to get out of the house.  While the Federal Reserve has indicated it is not worried about inflation at the moment, if demand-driven inflation proves to be persistently strong, the Fed timing for policy liftoff may potentially be pulled forward.  Much of the recovery in the financial markets since the Covid low last March has been driven by an extremely accommodative monetary policy by the FED.  The market may not react well if the FED has to start to drain the “punch bowl”.

Source: Goldman Sachs GIR, Commerce Dept, Labor Dept. As of Mar 24, 2021 Relative to the December meeting, more Fed committee members expected higher rates by 2023 YE.

Looking ahead, the market has clearly priced in a high degree of reopening, as reflected in rotation from Growth into Value and Cyclical stocks and sectors, as well as interest rates and inflation expectations. Earnings season will kick off in a few weeks and all eyes will be on company commentary for the summer months as a true gauge of demand and whether the market has re-priced economically sensitive themes too aggressively or too conservatively. Stay tuned.

I consider myself a reasonable man and will therefore adapt according to what the world as we move forward.

P.S. Thank you for your referrals. They are making a big difference in my practice. Feel free to share my name with your friends on Facebook or LinkedIn.

I want to extend a special thanks to clients & colleagues who have recently referred us to family and friends:  Christine H, Donna K, Eileen M, Peter B and Brian L

April Calendar of Events   (comments and additions for future months are always welcome)

  • April  is National Autism Awareness month.  Let’s all get educated on this issue and works towards acceptance and inclusion of people dealing with autism.

April 4th                     Easter Sunday – Have a blessed and Holy Easter

April 10th                     Christian’s wife Maecy birthday

April 12 & 13th            We adopted our 4 legged children Coco (2010) and Buddy (2013).  Sadly Buddy passed on 4/13/2019

April 15th                     Tax Day.  Remember to make those IRA or Roth contributions.  NOTE:  Tax day extended to May 17, 2021

April 22nd                     Earth Day – let’s all recycle, turn out lights when we leave rooms, and do all we can for our environment      

April 25th                     My daughter Satya’s birthday

Sources:  Nottingham Advisors, Goldman Sachs, Federal Reserve Board

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

Weekly Market Notes – March 29, 2021

For the Week of March 29, 2021

The Markets

Stocks rose Friday after February data showed lower price pressures, which eased inflation concerns. Each major index rose more than 1 percent. For the week, the Dow rose 1.36 percent to close at 33,072.88. The S&P gained 1.58 percent to finish at 3,974.54, and the NASDAQ dropped 0.57 percent to end the week at 13,138.72.

Returns Through 3/26/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.368.5849.8513.5516.28
NASDAQ Composite (TR)-0.572.1169.8523.2923.74
S&P 500 (TR)1.586.2053.7216.5316.58
Barclays US Agg Bond (TR)0.35-3.281.724.883.25
MSCI EAFE (TR)-0.553.7245.166.479.32
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

And in the Next Year — 2020 was the 10th year in the last 70 years in which the U.S. economy contracted. Our nation’s gross domestic product shrunk by 3.5 percent last year. Following the nine previous down years, the U.S. economy has rebounded in the next year with positive growth seven out of nine times, growing by an average of 3.3 percent per year for all nine bounce back years (source: Commerce Department, BTN Research).

Money They Will Spend — 42 percent of the $1.9 trillion American Rescue Plan Act of 2021, $800 billion out of the $1.9 trillion, is direct support that will be distributed to households in the form of stimulus payments, unemployment benefits and child tax credits (source: American Rescue Plan Act of 2021, BTN Research).

Year-Over-Year Improvement — The aggregate earnings per share of the companies in the S&P 500 in the first quarter of 2021 are forecasted to be 21.5 percent greater than the actual aggregate earnings per share of the S&P 500 companies from the first quarter 2020 (source: FactSet, BTN Research).

WEEKY FOCUS – Avoid These Medicare Mistakes

If you’re a newcomer to the complex Medicare system, or will be soon, it’s wise to research potential options and pitfalls to prevent future regrets. As a starting point, here are a few mistakes to avoid:

Missing Part B deadlines. If you’re already receiving Social Security benefits at 65, you’ll automatically be enrolled in Part A (hospital insurance) and Part B (doctors’ services, outpatient care, and medical equipment). Otherwise, you must apply. Fail to sign up for Part B during the seven months surrounding your birthday, and you risk incurring a late penalty surcharge on all your future premiums. You can delay enrolling only if you have health coverage from your or your spouse’s employer, and the company employs 20 or more workers. But if you do, make sure you enroll in Part B within eight months of leaving the company.

Not enrolling in Medigap promptly. It’s also wise to purchase a Medigap supplemental policy within six months of enrolling in Part B. Medigap standardized, private insurance plans cover some or most out-of-pocket expenses. Enrolling within that window restricts Medigap insurers from denying coverage or charging higher premiums due to current health or pre-existing medical conditions. Choose your plan carefully because those protections may not be extended if you try to switch later.

Not understanding Medicare Advantage plans. If you’re considering a Medicare Advantage plan in lieu of Medicare Parts A, B, and D, look beyond lower premiums and compare deductibles, copayments, and out-of-pocket costs. Bear in mind these plans may have more restrictions. And be sure to compare star ratings provided at Medicare.gov.

Not signing up for Part D. Even if you aren’t on any medications, developing one health problem could cause you to regret not getting a drug plan during an enrollment period. And you could incur a permanent late enrollment penalty if you don’t have Medicare or other creditable prescription drug coverage for 63 days in a row at any time after your initial enrollment period is over.

Not comparing Part D plans annually. Part D plans vary in the drugs they cover and the copays they charge. Use the Plan Finder program on Medicare’s website to compare plans. And once you’ve signed up, don’t put your Part D on autopilot. Check for premium increases and changes in coverage every year.

If you need help determining how health care costs may impact your retirement, please call our office.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America. SAI#1581151.1 

Weekly Market Notes – March 22, 2021

For the Week of March 22, 2021

The Markets

The Dow Jones and the S&P 500 fell Friday after the Federal Reserve decided not to extend a pandemic rule, which relaxed banks’ supplementary leverage ratio, allowing them to hold less capital against Treasurys and other holdings. For the week, the Dow fell 0.45 percent to close at 32,627.97. The S&P lost 0.74 percent to finish at 3,913.10, and the NASDAQ dropped 0.77 percent to end the week at 13,215.24.

Returns Through 3/19/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.457.1265.9812.4115.84
NASDAQ Composite (TR)-0.772.7086.3222.8423.77
S&P 500 (TR)-0.744.5565.2515.1616.06
Barclays US Agg Bond (TR)-0.28-3.614.264.753.17
MSCI EAFE (TR)0.594.2965.005.968.96
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Blame the Pandemic — Total exports of goods and services by American corporations in calendar year 2020 were $2.13 trillion, down 16 percent from the year before and the smallest total recorded nationwide since 2010 (source: Bureau of Economic Analysis, BTN Research).

Adding to Cash — Money market funds in the United States, including retail and institutional funds, both taxable and tax-free, have increased $615 billion (to $4.39 trillion) over the last 12 months through Friday, March 12, an average increase of $12 billion a week (source: Investment Company Institute, BTN Research).

Since Then — President Trump declared the coronavirus pandemic a national emergency on Friday, March 13, 2020. Over the one year since that announcement, the S&P 500 had gained 48 percent (total return), in spite of a horrible 12 percent loss (total return) on Monday, March 16, 2020 (source: BTN Research).

WEEKLY FOCUS – Don’t Let Unexpected Expenses Derail Your Retirement

While it’s natural to look ahead to a leisurely retirement, it’s prudent to prepare for expenses that catch many retirees by surprise. In a recent survey, nearly one-third of retirees reported they faced at least four unforeseen expenses during retirement. Some of the most common include:


Inflation: Inflation rates have been low since the 2008-2009 recession. But even subtle increases can add up over time. For example, $100 in June 2009 had the same buying power as $119.52 in June 2020.1  Unless that $100 was invested and grew, it effectively lost 20 percent of its value in just 11 years. And there is no guarantee inflation will remain low. It’s important to retain some investments that will grow your money to keep your retirement funds from losing their purchasing power over time.

Home Expenses: If the value of your home dramatically increases, so will your property taxes. On the flip side, if the value of your house declines dramatically, you may not be able to sell it without a loss. And there are repairs and maintenance to consider. Some financial professionals suggest setting aside 10 percent of your monthly payment, property taxes, and homeowner’s insurance for repairs and maintenance. Paying off your mortgage or downsizing can reduce monthly expenses and allow you to hold on to your home until reduced prices rebound.

Social Security and Other Taxes: If you’re like most recipients, you’ll pay income tax on your Social Security benefits. Individuals with total gross income (including benefits) of $25,000 may pay taxes on up to 50 percent of their Social Security benefits. Up to 85 percent of benefits are taxable for individuals with a combined gross income more than $34,000.

And all that pretax money you put into your 401(k) or traditional IRA is taxed at your top ordinary-income tax rate when you withdraw those funds. To mitigate the impact of taxes, consider withdrawing from those accounts earlier or putting money into a Roth IRA, which has no required minimum withdrawals and can be tapped without paying taxes.

Retirement is something most of us look forward to. Ensure your plans aren’t derailed by these unexpected expenses and others. Make sure you’re on the right track. Contact our office for a review of your financial situation and an evaluation of your goals.

Securities America and its representatives do not provide tax advice; therefore it is important to coordinate with your tax advisor regarding your specific situation.

[1] https://www.bls.gov/data/inflation_calculator.htm

Weekly Market Notes – March 15, 2021

For the Week of March 15, 2021

The Markets

Stocks ended mixed on Friday. Tech stocks slid as Treasury yields rose. The Dow Jones and the S&P achieved record closing highs after President Biden signed the stimulus bill into law. For the week, the Dow rose 4.17 percent to close at 32,778.64. The S&P gained 2.69 percent to finish at 3,943.34, and the NASDAQ climbed 3.12 percent to end at 13,319.86.

Returns Through 3/12/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)4.177.6058.0911.7416.47
NASDAQ Composite (TR)3.123.5086.4721.8324.21
S&P 500 (TR)2.695.3361.7814.4816.55
Barclays US Agg Bond (TR)-0.43-3.350.884.893.39
MSCI EAFE (TR)3.003.6852.045.329.05
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Quick, Before Rates Rise — 13 percent of outstanding home mortgages nationwide as of Dec. 31, 2020, i.e., 7.2 million mortgages out of 53.9 million mortgages, were refinanced during 2020 (source: Federal Reserve Bank of NY, BTN Research).

It’s the Renters Who Are Hurting — Just one in 39 homeowners (2.5 percent) was at least three months behind in paying their monthly mortgage as of Dec. 31, 2020. However, one in five renters (20.5 percent) was at least three months behind in paying their monthly rent as of Dec. 31, 2020 (source: Consumer Financial Protection Bureau, BTN Research).

What a Comeback — Many American employers have recovered, and as of Feb. 28, they have hired back 67 percent of the 25.4 million jobs that were lost last year during March and April 2020 (source: DOL, BTN Research).

WEEKLY FOCUS – Protect Yourself on Social Media

Like so many areas, social media cyber-attacks are on the rise, both on individual accounts and wider platform hacks. While you can’t prevent a large, headline-making hack, you can take practical steps like these to protect your own information:

  • Always use complex passwords on your social media accounts and update them frequently.
  • When filling out a social media profile, leave personal details – such as your home address, phone number, birthday, and email – blank. And don’t mention your mother’s last name or other personal details in posts, which cybercriminals could use to answer security challenge questions.
  • Don’t accept friend requests from anyone you don’t know in the real world. Don’t accept a second friend request if you’re already connected.
  • Secure your mobile devices with passcode, fingerprint, or facial protection/recognition. Upgrade as soon as possible when a social media app prompts you to do so.
  • Avoid using your social media accounts on public wireless connections, which make it easier for others to see your sensitive data. And if you access social media on a public computer (ideally, don’t), be sure to log out and clear your browsing history when you’re done.
  • Avoid signing into other apps using Facebook.
  • Consider setting up a “burner email” for social media activity, which isn’t tied to your name or other email accounts. 
  • Turn location tracking off on your social media channels. Turn off the GPS function on your smartphone camera if you plan to post images. Don’t post vacation photos until you return home.
  • Be cautious about clicking on links – even from friends – and completing quizzes and surveys.
  • Check your security settings on your social media accounts regularly. They may revert to a less private default when updates occur.
  • Make sure you have a quality security software installed on your devices.

Just as you strive to protect your personal information on social media accounts, we’re committed to keeping your financial account information secure. And as always, we’re available to discuss any concerns you may have about your finances.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright March 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3492438.1

Weekly Market Notes – March 8, 2021

For the Week of March 8, 2021

The Markets

Stocks ended higher Friday, reversing earlier losses. A report showing faster-than-expected job growth in February encouraged investors. Despite the rebound, the NASDAQ was negative for a third week in a row. For the week, the Dow rose 1.85 percent to close at 31,496.30. The S&P gained 0.84 percent to finish at 3,841.94, and the NASDAQ fell 2.05 percent to end at 12,920.15.

Returns Through 3/05/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.853.2923.2510.7015.83
NASDAQ Composite (TR)-2.050.3749.0822.0023.62
S&P 500 (TR)0.842.5729.3014.3516.21
Barclays US Agg Bond (TR)-0.80-2.93-0.265.083.46
MSCI EAFE (TR)-0.490.6618.645.098.64
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Smaller Homes — The average size of a single-family home built in the United States in 2019 was 2,509 square feet, the fourth consecutive year that the national average size has declined (source: Census Bureau, BTN Research).

Record Low Set a Year Ago — The yield on the 10-year Treasury note closed at 1.46 percent on Friday, Feb. 26. The all-time record-low close for the 10-year note was .50 percent set on March 9, 2020. 10-year notes have been traded in the U.S. since 1790 (source: Treasury Department, BTN Research).

All My Work — The average American worker has increased their productivity by 50 percent in the last 21 years. As of Dec. 31, 2020, an average worker can complete in two hours, the same amount of work that it took them three hours to finish as of Dec. 31, 1999 (source: Department of Labor, BTN Research).

WEEKLY FOCUS – Don’t Shred Those Tax Documents Yet

Once you complete this year’s taxes, you may wonder what to do with that pile of records, 1099s, receipts, and bank statements. The IRS recommends holding on to any documents related to the income you’re reporting or any deduction or credit you’re claiming, including:

  • Proof of income, including W-2s and 1099s, bank and brokerage statements, K-1 forms, and spousal-support payment records
  • Bills and invoices, credit card statements, mileage logs, and cancelled checks
  • Financial records related to real property, including paperwork from the purchase or sale of a home and all documents associated with the costs of buying, selling, or managing rental properties
  • Investment records related to stock transactions, IRAs, and other retirement accounts

If you’re not sure whether to keep a document or not, err on the side of caution and store it in your files. How long you should hang on to all those documents varies, depending on the action, expense, or event that the document records. The IRS has the right to review all tax returns filed during the Period of Limitations, the time in which you can amend your tax return to claim a credit or refund or the IRS can assess additional tax. That period is typically three years from the date you filed for any given year.

Some documents should be kept even longer. For example, the IRS recommends keeping employment tax records for at least four years after related taxes become due or are paid, whichever is later. Tax records related to property should be kept until the period of limitations expires for the year you dispose of the property. If you believe you may have under-reported your annual income by 25 percent or more, you should keep your return and related documentation for six or seven years.

It’s best to create digital copies of all your documents. That way, if the printed version is lost or destroyed, you’ll have a backup.

We are happy to work with you and your tax professional to help keep your financial records up-to-date and create a personal financial plan tailored to your habits and lifestyle. Call us today. 

Securities America and its representatives do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia, and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright March 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 3482518.1

March 2021 Monthly Outlook – “What a Long, Strange Trip It’s Been”

In many ways, 2021 has continued the wild trip we have all been on since early 2020 and the onset of Covid.  Good news and bad news, running simultaneously.

Here are some headlines from just the last week of February 2021:

  • Chairman Powell told Congress, “The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain.”
  • “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” – Warren Buffett
  • FDA grants emergency use authorization for Johnson & Johnson COVID-19 vaccine
  • All our recent progress with Covid-19 could be wiped out by variants, CDC director says. ‘Please stay strong’

Equities experienced a choppy month in February, as rising Treasury yields raised concerns about inflation and stock valuations.  Economic indicators, other the other hand, have been rebounding strongly.  However, employment is still lagging considerably, with some 10 million employees and small business owners still out of work.

Financial Markets:

Tail Meets Dog
Ultimately, stock valuations and interest rates are determined by economic performance. That markets are discounting near-certain continued growth is evidenced by sizable gains in most financial markets. Should questions emerge about the pace of economic improvement, such as we are seeing in the jobs data, the bull case could be challenged. There is little room for disappointment given the run-up in stock prices, tightening of credit spreads, and steepening of the yield curve. Six or nine months ago, there was plenty of room for improving expectations, but now those expectations need to be met. It seems the “dog has caught its tail” as markets have run ahead of the economy in anticipation of full recovery.  

Stocks, as represented by the S&P 500, hit the ceiling around mid-February and then spent 2 weeks declining to just above a critical support level.  My outlook is that a correction of perhaps 10% was taking shape.  Of course, as I write this note on Monday March 1, 2021, stocks are staging an impressive rebound (+2% across the board) – perhaps the dog has not caught its tail just yet.  One thing we have observed, and made adjustment to, is that first two months of 2021 have been marked by a cyclical rotation into energy, financial, and other industries that are poised to do well from a return to economic growth and rising interest rates.

Time will tell if this strange trip continues or we finally start to return to some form of normalcy but we remain focused on your long-term goals.

We hope you find this outlook informative.  Please feel free to share it.

Best regards,

Jim

March Calendar of Events   (comments and additions for future months are always welcome)

March is Women’s History Month.  Please says thanks to all the important women in your life.

March 8th                    International Women’s Day

March 14th                  Daylight Savings begins – Spring forward

March 17th                  St Patrick’s Day

March 20th                  Spring begins in US 

March 27th                  Passover begins

March 28th                  Palm Sunday

Sources:  CNN Business, Washington Cross Advisors

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

Weekly Market Notes – March 1, 2021

For the Week of March 1, 2021

The Markets

Stocks closed mixed Friday as government bond yields rose, spurring concerns of rising inflation. The NASDAQ pared earlier losses but still suffered its worst weekly loss since October. For the week, the Dow fell 1.70 percent to close at 30,932.37. The S&P lost 2.41 percent to finish at 3,811.15, and the NASDAQ dropped 4.90 percent to end the week at 13,192.35.

Returns Through 2/26/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-1.701.4124.419.8016.08
NASDAQ Composite (TR)-4.902.4755.2723.1724.99
S&P 500 (TR)-2.411.7231.2914.1416.82
Barclays US Agg Bond (TR)-0.36-2.151.385.323.55
MSCI EAFE (TR)-2.801.1522.464.599.73
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

How We Live — Of the 7.2 million new U.S. households created in the last four years, 100 percent were owner households while none were renter households, i.e., owner households grew from 75.6 million (Dec. 31, 2016) to 82.8 million (Dec. 31, 2020), while renter households remained flat at 43 million (source: Census Bureau, BTN Research).

Supply and Demand — The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of April 9, 2020, as the global impact of COVID-19 was crushing the worldwide demand for oil. On Friday, Feb. 12, WTI crude oil closed at $59.47 a barrel, its highest closing price since Jan. 9, 2020 (source: NYMEX, BTN Research).

Stock Market — The median annual return of the stock market over the last 45 years (1976-2020) was a gain of 15.8 percent (total return). The stock market has produced a positive total return gain in 37 of the last 45 years, i.e., 82 percent of the time. The S&P 500, consisting of 500 stocks chosen for market size, liquidity, and industry group representation, was used as the stock measurement. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

WEEKLY FOCUS – The Art of Complaining

Even when you do your research, you can wind up with a purchase that doesn’t live up to a company’s claims. Since this is National Consumer Protection Week, today’s article tells you what to do to avoid losing money when marketing claims prove inaccurate.

Gather pertinent information. Find the company’s return and exchange policies. For instance, time limits for retail returns can vary from seven to 90 days. Locate your receipt, contract/warranty, order number, model number, and previous communication. If you don’t have a receipt but paid with a credit card, find the purchase date on your statement. For in-person returns, bring the card you used and your ID.

Choose your form of contact. A face-to-face or phone conversation may make it easier to connect on a personal level and appeal to a service person’s compassion. Address them by name, describe your problem, and ask, “Can you help me?” When you’re seeking a simple fix or want to create a communication trail, use email. Including words like “complaint” or “refund” may bump your email to a priority list since some systems look for such keywords.

Stay calm. Don’t expect a resolutionin 60 seconds. Be patient, respectful, specific, and concise. Know what you want: a replacement, refund, or repair. But wait to see what they offer before stating your goal. You can always counter, and their suggestion may be better than you expect. Document each interaction with the date, person you communicated with, and what you were told. Keep copies of correspondence or screenshots of online chats.

Escalate if needed. When you can’t settle your issue through customer service, ask to speak to a manager or write a short letter to an executive. Or check the company’s Facebook page to see if they respond to customer service matters there. If nothing else works, you can file a complaint with the Better Business Bureau. Make sure your statements are accurate and complete; once you submit your complaint, it can’t be edited. It’s important to remember you are legally responsible for what you say. If you want to go farther, you can complain to your state attorney general’s office or take the business to small claims court.

Ensuring you get what you pay for – so you don’t have to spend additional money to replace an item – is just one way to preserve assets. Contact our office if you’d like help identifying others.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright March 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3471986.1

Weekly Market Notes – February 22, 2021

For the Week of February 22, 2021

The Markets

Stocks ended a choppy week mixed. The S&P and the NASDAQ  suffered their first weekly losses this month amid rising interest rates and expectations of growing inflation. For the week, the Dow rose 0.16 percent to close at 31,494.32. The S&P dropped 0.68 percent to finish at 3,906.71, and the NASDAQ fell 1.54 percent to end the week at 13,874.46.

Returns Through 2/19/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)0.163.179.7010.1916.67
NASDAQ Composite (TR)-1.547.7542.5325.4626.56
S&P 500 (TR)-0.684.2317.4414.8317.59
Barclays US Agg Bond (TR)-0.57-1.803.515.463.66
MSCI EAFE (TR)0.274.0713.095.2810.39
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ, and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

It’s an Index — Inflation, as measured by the Consumer Price Index (CPI), was up 1.4 percent for 2020. The category food in the CPI calculation was up 3.9 percent for the year and medical care services was up 2.8 percent, but energy was down 7.0 percent last year (source: Department of Labor, BTN Research).

Let’s Shoot for More — A 65-year-old American male has a life expectancy of 18.2 years. A 65-year-old American female has a life expectancy of 20.8 years (source: National Center for Health Statistics, BTN Research).

Thought It Would Be Higher — 522,808 Americans filed bankruptcy in 2020, down 30 percent from 752,160 bankruptcy filings in 2019 (source: United States Courts, Table F-2, Bankruptcy Filings, BTN Research).

WEEKLY FOCUS – Financial Health Check

With almost two months of the new year elapsed, it’s a good time to look at how well your recent behavior aligns with your financial goals. If there’s room for improvement, you might consider applying one of these savings strategies.

Try a financial fast. Just as intermittent fasting from food has become popular among dieters and health enthusiasts, you might try a financial fast to quick start your savings. You may choose to go cold turkey, avoiding all unnecessary purchases, or to eliminate specific activities or categories of spending for a designated period of time. For instance, you could avoid shopping with credit or debit cards since researchers say customers spend less when using cash or put off clothes shopping. A financial fast can be as short as a week or extend a month or more.

Budget by the day. Another way to modify behavior is to set a daily budget and track your spending to see how it aligns when averaged over a month. Suppose you think $50 a day is a reasonable goal for non-fixed expenses, including groceries. Record your daily purchases in a spreadsheet; there’s something about seeing what you’re spending day by day that inspires discipline. If you are over goal for a week or two, try to spend less the following weeks to stay on target for the month.

Delay gratification. Before putting an item in your shopping cart (in person or online), pause for 20 seconds and ask yourself if you really need it. Better yet, wait a day and see if you still want it. It’s surprising how often enthusiasm cools after an impulse fades. For larger purchases, wait several weeks to evaluate your decision.

Time purchases. Trying to time the stock market rarely works, but many purchases are another story.You’ll usually save by buying food in season and clothing out of season. Some items are consistently on sale at certain times. Shop for mattresses in May and computers during back-to-school or Black Friday sales. Look for last year’s car models between September and December, when most new models come out.

Any of these approaches can help you resist the urge to splurge and lead to more mindful spending. Contact our office if you need more help identifying potential money-saving opportunities.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright February 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3461689.1

Weekly Market Notes – February 16, 2021

For the Week of February 16, 2021

The Markets

Stocks rose Friday, thanks to a recent drop in new COVID cases and hospitalizations, stronger-than-expected earnings over the past couple weeks, and anticipation of new fiscal aid. The S&P and the NASDAQ closed at record highs. For the week, the Dow rose 1.11 percent to close at 31,458.40. The S&P gained 1.28 percent to finish at 3,934.83, and the NASDAQ climbed 1.74 percent to end at 14,095.47.

Returns Through 2/12/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.113.008.9411.0817.27
NASDAQ Composite (TR)1.749.4446.1827.6627.93
S&P 500 (TR)1.284.9418.5616.2118.42
Barclays US Agg Bond (TR)-0.13-1.234.445.623.81
MSCI EAFE (TR)2.375.0413.595.8210.88
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ, and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Jobs — The Congressional Budget Office forecasted on Feb. 1 that the number of employed Americans (150 million as of Jan. 31) will not recover to its pre-pandemic level of 158.7 million until 2024 (source: CBO, BTN Research). 

Global Trade Rebounds — After declining for 10 months during the 2020 pandemic, the monetary value of goods shipped worldwide in November 2020 exceeded its previous high-water mark achieved in December 2019 (source: Netherlands Bureau for Economic Policy Analysis, BTN Research).

Nothing — 76 percent of 619 millennials surveyed in the fourth quarter 2019 do not believe Social Security will exist when they retire. Millennials were born between 1981-97 and are ages 24-40 in 2021 (source: Transamerica, BTN Research).

WEEKLY FOCUS – Choosing an Executor for Your Will

Most of us recognize the importance of creating a thorough, well-reasoned estate plan. But we may not give adequate thought to choosing an executor to carry out the provisions of our wills. It’s all too easy to default to a relative without objectively weighing their qualifications or the challenges they may face. Because of the importance and potential complexity of the executor’s role, it’s wise to answer multiple questions before making your choice.

Will they be around? You probably shouldn’t select someone who is older than you or in questionable health. To be on the safe side, name an alternate in case your primary executor is unable to fulfill the role. This is usually a better option than co-executors. Although it may seem sharing responsibilities could lighten the load, it often complicates decisions, paperwork, and banking activities.

Are they local? Some states don’t allow out-of-state executors unless they are a relative or a primary beneficiary. Many states impose special rules for non-resident executors or require them to obtain a bond. An executor who lives outside the area may also find it more difficult to maintain the deceased’s property.

How capable are they? A business or legal background is helpful but not necessary. Executors can, and often should, work with an attorney and an accountant. Honesty, intelligence, discipline, organizational skills, and the ability to communicate well are essential.

Are they willing? Never name an executor without asking their permission.

Are they still the right choice? Just as you do with beneficiaries, it’s important to review your decision periodically in case something has changed. Perhaps there has been a divorce or the person you designated has developed a health condition.

Should you consider a professional? You may want to name a third-party executor if you have a blended family, your family dynamics are difficult, you want to make things easier for a bereaved spouse, or you don’t have a suitable relative or friend. A bank, trust company, or a professional who has experience dealing with estates can serve as an executor. Executor fees vary from state to state but often range between one and five percent of the estate.

Estate planning can be very involved, and it’s crucial to get it right. We are happy to work with you, your attorney, and your tax professional to find solutions for your situation. 

Securities America and its representatives do not provide legal advice; therefore it is important to coordinate with your legal advisor regarding your specific situation.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright February 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3453509.1