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.

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.

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.

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.

For the Week of February 8, 2021

The Markets

Stocks rose Friday amid optimism around earnings, stimulus talks, and the vaccines rollout. The three major indices posted their best weekly gains since November; the S&P 500 and Nasdaq ended at record closing highs. For the week, the Dow rose 3.90 percent to close at 31,148.24. The S&P gained 4.67 percent to finish at 3,886.83, and the NASDAQ climbed 6.04 percent to end at 13,856.30.   

Seller’s Market — There were 1.07 million existing homes for sale nationwide as of Dec. 31, 2020. Two years earlier, on Dec. 31, 2018, there were 1.53 million existing homes for sale nationwide. Ten years earlier, on Dec. 31, 2010, there were 3.02 million existing homes for sale nationwide (source: National Association of Realtors, BTN Research).

Relief Dollars — 36 percent of stimulus payment money received by Americans from the March 2020 CARES Act was put into savings, while 35 percent was used to pay down debt (source: Federal Reserve Bank of New York, BTN Research).

Going My Way? — The three most popular states to move to during 2020 were Tennessee, Texas, and Florida. The three states with the greatest outflow of people during 2020 were California, Illinois, and New Jersey. The rankings are based upon more than 2 million rentals of moving trucks last year that involved a one-way interstate movement of furnishings, personal possessions, and clothing (source: U-Haul Migration Trends 2020, BTN Research).

WEEKLY FOCUS – Contemplating a Second Career

When you were a child, you dreamed about what you’d do when you grew up. If you’re middle aged, you may be dreaming about what you’ll do when you retire. Retirement looks different today than it once did, with second careers becoming more and more popular. According to a Federal Reserve Board study, one third of those who retire eventually return to work on either a full- or part-time basis.

That’s not surprising. With average life expectancies around 80 years and many living comfortably to age 90, retirees have time to create a second act, which encompasses more than hobbies, golfing, or traveling. Retirees who don’t have enough outside interests may miss the social interaction and the sense of accomplishment of working. A second career can keep seniors’ minds sharp, offer a sense of connection, and provide the means to indulge in some added luxuries.

With less necessity to earn a certain level of income, retirees are free to do something new or make a difference. Many choose to address social problems by working with one of the nation’s 1.5 million nonprofits. Others teach, watch pets, or go into sales. Still others become entrepreneurs, consultants, or career coaches. Bureau of Labor research shows older workers have higher rates of self-employment than their younger counterparts.

Work flexibility is another advantage second careers have over first careers. Retired workers can decide how much they want to work and when. By leveraging the professional and interpersonal skills they’ve developed over the years, retirees can find a situation they find personally fulfilling, one that allows them to make new friends, meet new challenges, and achieve an optimal balance of work and leisure.

The best time to plan a second career is while you’re still working in your first career. Take time to research your aspirations and the market. Talk to people working in a role you’re interested in. Ask to job shadow. Expand your network. Try living on a lower income as a trial run. Build your skills by volunteering or taking classes.

We’re here to help you achieve your goals. Whether you’re looking forward to traditional retirement or a second career, we can help you evaluate your financial situation, so you can make the decision that’s best for you.