Weekly Market Notes – December 28, 2020

For the Week of December 28, 2020

The Markets

All three major indices ended a shortened holiday week on an up note as investors digested surging virus cases, the ongoing vaccine rollout, uncertainty over the Georgia runoff, a fall in unemployment claims, and new hurdles to the stimulus bills. For the week, the Dow lost 0.34 percent to close at 30,199.87. The S&P lost 0.49 percent to finish at 3,703.06, and the NASDAQ gained 0.32 percent to end the week at 12,804.73.

Returns Through 12/25/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.348.278.359.3614.18
NASDAQ Composite (TR)0.3243.9744.3023.7921.77
S&P 500 (TR)-0.4916.7117.0113.5114.70
Barclays US Agg Bond (TR)0.087.277.385.444.38
MSCI EAFE (TR)-0.606.336.834.117.12
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.

All the Other Stuff — Administrative costs make up 34 percent of total U.S. health care expenditures (i.e., expenses not related to direct patient care) including medical billing, the scheduling of appointments, and hiring of office staff (source: Annals of Internal Medicine, BTN Research).

Help for College Students —The Department of Education announced on Friday, Dec. 4, a second extension through Jan. 31, 2021, of the forbearance period on federal student loans. The forbearance plan, a pause in required principal and interest payments, began March 13 and was set to expire Sept. 30 but was previously extended on Aug. 21 through the end of 2020. 92 percent of all student loans (by dollar) are federal loans. The remaining 8 percent are loans originated by a private lender (source: Department of Education, BTN Research).

Advantage: Sellers — The number of existing single-family homes for sale has been tracked nationally since July 1982. The total peaked in July 2007 at 3.4 million but has now fallen to match its all-time low of 1.22 million in December 2019 (source: National Association of Realtors, BTN Research).

WEEKLY FOCUS – Financial Resolutions for 2021

Despite a crazy year or perhaps because of it, over half of Americans are expected to make at least one financial resolution for 2021.1 If you haven’t identified yours, here are a few to consider.

Pad your retirement savings. You probably spent less on travel, restaurants, movies, gas, or sporting events in 2020. Why not maintain some of those cuts after things normalize and add the savings to your retirement account?

Increase your emergency fund. According to FINRA, almost half of Americans don’t have a rainy day fund. If you don’t have an emergency fund equal to six months of income, start one. If you do, why not add enough to cover an additional month or two of expenses?

Reduce debt, safeguard credit. Automate account payments to avoid missing any. Plan to eliminate debts before retiring.Thwart identity thieves with credit monitoring, which notifies you when key information on your file changes.

Create a long-range plan. If you’re married, project future expenses if you both live to 95 or either of you dies and the other lives to 95. Then go to ssa.gov/myaccount to estimate Social Security benefits you’d receive when claiming at different ages. Determine how much more you’ll need to maintain your lifestyle.

Review your insurance and estate plan. Make sure your insurance coverage is adequate and beneficiaries are up to date. If you haven’t reviewed your estate plan recently, you’ve moved, or your assets or family has changed, schedule a meeting with your estate planning attorney.

Invest in yourself. Health care is expensive. Studies indicate the average 65-year-old couple retiring in 2020 can expect to pay $295,000 for out-of-pocket health care and medical expenses (not including potential long-term care). Taking steps to stay fit now may help you enjoy retirement and save money.

Work with a coach. Your odds of successfully implementing goals increase when you have an objective, knowledgeable partner. Make an appointment to discuss your financial resolutions and how we can work together to make 2021 a happy and prosperous new year!

1https://www.magnifymoney.com/blog/banking/money-resolution-survey/

2money.usnews.com/money/retirement/aging/articles/preparing-for-medical-expenses-in-retirement

*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 December 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3383589.1

Weekly Market Notes – December 14, 2020

For the Week of December 14, 2020

The Markets

The S&P 500 and the NASDAQ ended Friday with modest declines despite the FDA’s emergency use authorization of Pfizer’s COVID-19 vaccine for individuals 16 years of age and older. Investors appeared cautious amid conflicting headlines on progress toward another stimulus deal. For the week, the Dow fell 0.54 percent to close at 30,046.37. The S&P lost 0.95 percent to finish at 3,663.46, and the NASDAQ dropped 0.69 percent to end at 12,377.87.

Returns Through 12/11/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.547.702.569.7214.44
NASDAQ Composite (TR)-0.6939.145.1022.9021.50
S&P 500 (TR)-0.9515.392.7113.4315.00
Barclays US Agg Bond (TR)0.357.210.905.324.25
MSCI EAFE (TR)-0.514.874.243.967.20
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.

Small Businesses Rule — Small American businesses, defined as having less than 500 employees, are responsible for 44 percent of U.S. economic activity (source: U.S. Small Business Administration Office of Advocacy, BTN Research).

Post-Election Gains — In the 22 trading days following the Nov. 3 election through Friday, Dec. 4, the S&P 500 gained 10 percent (total return) and set seven all-time record closings (source: BTN Research).

Not a Great Return — An American male retiring at age 65 in 2020 who has earned the maximum taxable wage for Social Security taxes every year during his working career ($137,700 in 2020) is projected to have paid $741,000 (stated as a 2020 present value number) in lifetime Social Security taxes but is projected to receive just $533,000 (stated as a 2020 present value number) in lifetime benefits (source: Tax Policy Center, BTN Research).

WEEKLY FOCUS – Smart Things to Do With a Year-End Bonus

Despite the pandemic, two-thirds of U.S. employers still plan to offer their employees year-end bonuses. If you work for one of those companies, it is wise to come up with a thoughtful plan for the extra cash. If you need more time to consider your options, deposit the money in a savings account. It will be harder to chip away at it if it’s not connected to your debit card. Here are a few other suggestions.

Account for taxes. If your employer doesn’t withhold taxes from your bonus, or doesn’t withhold enough, make sure to set aside money to pay them. 

Increase your bonus’ value. Contributing the maximum allowed to a pretax employer retirement plan can make your bonus go farther than using it as after-tax dollars, especially if your employer matches the contributions. If your income falls within IRS guidelines, you may be able to make pretax contributions to your 401(k) and a traditional IRA or add post-tax contributions to a Roth IRA, which will grow tax-free.

Put your money to work. Since a bonus is extra money, it may be easier to use it for an investment with long-term growth potential or to rebalance your portfolio by introducing new money rather than selling stocks.

Build your emergency fund. Everyone should have liquid savings available to cover six months’ worth of living expenses when the unexpected occurs. If you keep your fund in a savings account, be sure to shop around for the best rates, or consider a short-term CD.

Invest in yourself or loved ones. Many of the most successful people continually pursue knowledge and increase their skills. You might take a coding course, learn a language, hire a health coach, pay for a professional certification, or enroll in a public speaking program. If you have a child or grandchild, you could contribute to their 529 plan.

Plan an experience. Research indicates great memories often provide more satisfaction than purchases. In the midst of a rough winter, planning a future vacation can give you something to look forward to. 

We’re here to help you reap the rewards of your success and build a brighter tomorrow. Call our office to schedule a time to discuss what you want to accomplish in 2021 and beyond.

We 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 December 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3369082.1

Student Loan Forbearance Extended Through 1/31/21

Folks,

On 12/4/20 the U.S. Secretary of Education Betsy DeVos announced an extension on the federal student loan forbearance period. Federal student loan borrowers will not be expected to make payments through January of next year, 2021. Non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness program.

During this forbearance period any payments will go directly to the loan principal which will lower your interest payment in the future. We urge our clients to take advantage, if financially feasible, of this opportunity and pay down the principle on your loans.

This article was posted by the U.S. Department of Education:

https://www.ed.gov/news/press-releases/secretary-devos-extends-student-loan-forbearance-period-through-january-31-2021-response-covid-19-national-emergency

If you or anyone know anyone you know needs help understanding their student loan status please feel free to contact us.

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 – December 8, 2020

For the Week of December 7, 2020

The Markets

Stocks rose Friday despite a disappointing November jobs report and rising coronavirus cases. Expectations of a new fiscal relief bill helped all three major indices close at record highs. For the week, the Dow rose 1.16 percent to close at 30,218.26. The S&P gained 1.72 percent to finish at 3,699.12, and the NASDAQ climbed 2.14 percent to end at 12,464.23.

Returns Through 12/04/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.168.2811.8710.0913.82
NASDAQ Composite (TR)2.1440.1046.8423.7920.67
S&P 500 (TR)1.7216.5021.0814.1014.35
Barclays US Agg Bond (TR)-0.426.846.785.204.28
MSCI EAFE (TR)1.025.419.254.216.79
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.

Most Are Current — One in 13 home mortgages nationwide (7.65 percent) were at least one monthly payment delinquent as of Sept. 30. Just one in 25 home mortgages nationwide (3.97 percent) were at least one monthly payment delinquent as of Sept. 30, 2019 (source: Mortgage Bankers Association, BTN Research).

November to Remember — With one trading day remaining in November, the S&P 500 had gained 11.4 percent month-to-date (total return) through Nov. 27, a performance better than 99.7 percent of the last 360 months (source: BTN Research).

Primary Household Assets — 62 percent of the average net worth of an American household comes from just two assets – the equity they have built up in their home and the value of their retirement accounts (source: Census Bureau, BTN Research).

WEEKLY FOCUS – Gifts With Lasting Impact

Looking for gifts that will be appreciated long after the holiday decorations are stashed away for next year? Here are a few ideas for presents with lasting impacts.

For younger children or teens: Encourage an interest in investing with a gift card from Stockpile.com. For $25, $50, or $100, you can purchase fractional shares of stock from popular companies like Pepsi, Facebook, Apple, and Disney. The site offers physical gift cards you can put in Christmas stockings and e-gifts you can send instantly. Recipients redeem the cards on the site, which is an online brokerage. Twenty-five percent of Stockpile’s customers are kids and teens.

Help finance future qualified educational expenses for a loved one by contributing to (or establishing) a 529 savings plan. Although contributions aren’t pretax, earnings aren’t taxed. And some states will let you deduct a portion of contributions from your state taxes. Once the plan is set up, sites such as GiftofCollege.com and LeafSavings.com offer gift cards that make it easy to contribute directly to a 529 account.

For the older teenager with earned income: Encourage a teen to think about the future by helping them start a Roth IRA. You can gift money to fund their IRA for as much as they earn up to the $6,000 limit for 2020.Stocks, U.S. Savings Bonds, and CDs also make good gifts by promoting financial literacy in young investors.

For adult children: If a family member dreams of starting their own business, provide great insights on running a business, franchising, and meeting startup challenges with a subscription to Inc. or Entrepreneur. Magazines like Forbes, Bloomberg Businessweek, or Money might fuel an interest in investing.

Or give a gift of time. Younger adults just starting out might not have enough financial resources for serious investing – but they do need a financial strategy and could benefit from the guidance of a financial professional. Even an older adult child could benefit from a financial tune-up.

While you may be doing your best to teach your children and grandchildren about personal finances, confirmation from an outside source could reinforce your message. We’d be happy to educate them on the importance of setting long-term goals, creating a budget, and setting up a financial plan.

We 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 December 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3359282.1