Weekly Market Notes – June 7, 2021

For the Week of June 7, 2021

    The Markets

Stocks rose Friday. The Labor Department’s May jobs report showed unemployment fell to a pandemic-era low of 5.9 percent, and new job growth was stronger than April’s but short of expectations. The mixed news appeared to assure investors the Fed would retain its accommodating money policies. For the week, the Dow rose 0.69 percent to close at 34,756.39. The S&P gained 0.64 percent to finish at 4,229.89, and the NASDAQ climbed 0.49 percent to end at 13,814.49.

Returns Through 6/04/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)0.6914.5534.9214.4517.00
NASDAQ Composite (TR)0.497.5144.7223.1824.08
S&P 500 (TR)0.6413.3538.0817.6517.28
Barclays US Agg Bond (TR)0.12-2.170.165.293.15
MSCI EAFE (TR)0.7311.2232.518.189.95

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.

Did You Need It? — 40.3 percent of college graduates aged 22 to 27 are working in jobs in which they are underemployed, i.e., they are working in a job that typically does not require a college degree. Historically, 33.5 percent of college grads are underemployed (source: Federal Reserve Bank of New York, BTN Research).

Will It Be Spent Eventually? — The personal savings rate in the U.S. in the first quarter 2021 was 21 percent. The personal savings rate in the U.S. in the first quarter 2001 was 5 percent. The personal savings rate is defined as savings (i.e., after-tax income less consumption spending) divided by after-tax income (source: Department of Commerce, BTN Research).

Not a Big Number? — At its peak, 3.7 million home mortgages (out of 52.4 million mortgages nationwide) had requested and received forbearance protection afforded through the CARES Act that was signed into law by President Donald Trump on March 27, 2020. As of March 2021, that total had fallen to 2.2 million home mortgages still in forbearance, or just 4.2 percent of all mortgages (source: Federal Reserve Bank of New York, BTN Research).

WEEKLY FOCUS – June Is Alzheimer’s & Brain Awareness Month

It’s difficult to find someone who has not been emotionally and/or financially impacted by Alzheimer’s. Alzheimer’s is one of our nation’s costliest diseases. According to the Alzheimer’s Association, total payments for all individuals with Alzheimer’s or other dementias are estimated to total $355 billion in 2021 (not including unpaid caregiving). Sadly, afflicted individuals without adequate long-term care insurance frequently lose most, if not all, of their financial assets.

But even dementias’ beginning stages and mild cognitive impairment experienced by healthy seniors can put personal wealth at risk. That’s why it’s important to begin having conversations about your aging family member’s finances well before you see signs of mental decline. Obviously, this has to be done with great sensitivity and respect. Make sure they know you don’t want to take control, but you would like to ensure they are protected and their wishes honored in the years to come.

During ongoing dialogs, try to learn what you’ll need to know if it becomes necessary to manage their finances: the names and contact information of their financial planner, accountant, and attorney; financial records and where they are kept; their monthly income and the sources; insurance policies; the location of financial accounts; regular bills and how they are paid; and log-in information for online accounts.

Suggest meeting jointly with their financial professional and/or other family members. Gain an understanding of their priorities and wishes. Ask which assets are most important to them, what causes they want to support, and whether their will is up to date.

Propose having legal documents created that will allow you or another family member to make decisions if your loved one becomes unable to. This can include: a health care power of attorney (POA) or a more limited living will, either a limited or durable power of attorney for finances, an authorization to disclose account information, and a form authorizing a financial institution to contact you if concerns arise about their ability to manage finances. Not having these documents when they’re needed can make helping your elderly relative considerably more difficult. For example, without a POA, you may need to go to court to attain guardianship of your family member to access accounts on their behalf.

Contact our office if you would like more information about protecting your loved one or help creating a plan to care for them.

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 June 2021. All rights reserved. Securities offered through Securities America, Inc., broker-dealer and member of FINRA and SIPC. Investment advisory services offered through Securities America Advisors, Inc. and/or Arbor Point Advisors LLC, registered investment advisers. Securities America, Inc., Securities America Advisors, Inc., and Arbor Point Advisors LLC are separately owned and other entities and/or marketing names, products or services referenced here are independent. Securities America • 12325 Port Grace Blvd. • La Vista, NE 68128 • 800-747-6111 • securitiesamerica.com #3621494.1

June 2021 Monthly Outlook – Fully Invested Bear

Financial markets basically traded sideways during May, with stocks gaining 0.5% (S&P 500), while interest rates declined slightly dropping 0.05% (US 10yr Treasury).

We have a number of key economic reports and events in June that may dictate whether the market continues to trend sideways or makes a move either up or down.  On June 4th we get the May Jobs report, which will be an indication of how the job market is recovering with the economy opening up.  June 15-16 is the next Federal Reserve Board meeting, and I will be watching how they respond to the rising inflation we are seeing.  June 30th brings the start of 2nd quarter corporate earnings reports.

June is also a weak month for stocks, producing positive results only 40% of the time over the last 20 years with average returns for the month roughly negative 1%.

Two other factors I am watching closely: 

  1. The total market capitalization (stock price x # of shares) is now at an extreme level compared after a crisis, which then had a multi-month, double-digit pullback before resuming the rally                        
  2. The March 2020 rally to present is starting to resemble a pattern to the 1982 and 2009 recoveries to GDP.  This is one of Warren Buffet’s warning signs that stocks are expensive. 
Expectations (1)

Based on the above, I am operating as fully invested bear.  In the short to medium term, I am cautious about a potential correction.  Longer term, I believe the bull market and economic recovery from Covid-19 has further room to run.  As such, we have tightened up our risk levels but remain fully invested in broadly diversified portfolios and will adjust as conditions dictate.

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:  Greg & Valerie W.

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

  • June is LGBTQ Pride Month.  I’m an incredibly proud father of a daughter in an awesome same sex marriage.  So let’s all work towards acceptance and inclusion of people regardless of their sexual orientation.

June 14th        Flag Day                  

June 20th        Summer begins – it’s certainly going to be a different summer.  Enjoy it safely       

June 20th        Father’s Day  – wishing all father’s, grandfathers, and great grandfathers a wonderful day.

Sources:  Bloomberg, Ned Davis Research, Day Hagan Asset Management, CNBC

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.

Annual Credit Report Reminder

Summer is just around the corner, and with the barbecues and cicadas comes another reminder from us that you should check your credit report.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. Here is a link to the Federal Trade Commission website   http://www.consumer.ftc.gov/articles/0155-free-credit-reports

To get your credit report online visit this site:  https://www.annualcreditreport.com/index.action  Click on request your free credit report.

Since you get 1 report each year from each reporting company my suggestion is to spread them out during the year.  For example, request Equifax in January, Experian in May, and TransUnion in September.  That way you can see any changes made throughout the year.

If you would rather make the request by mail , print and complete the attached Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.  Again, I would print 3 copies and make separate requests throughout the year.

Review each report for inaccuracies or incomplete information and follow the supplied instructions on how to get these corrected.

Please call me if you have any questions on this information. annual-report-request-form

Weekly Market Notes – May 10, 2021

For the Week of May 10, 2021

The Markets

Stocks rose to record levels Friday despite negative economic news. The Labor Department reported just 266,000 non-farm jobs were added last month, far from the 1 million forecasters expected, and the unemployment rate rose 6 percent. Bad news seemed to be good news to investors expecting the Fed to keep interest rates low. For the week, the Dow rose 2.72 percent to close at 34,777.76. The S&P gained 1.26 percent to finish at 4,232.60, and the NASDAQ dropped 1.48 percent to end at 13,752.24.

Returns Through 5/7/20211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)2.7214.3348.7315.2417.13
NASDAQ Composite (TR)-1.486.9454.3624.9225.05
S&P 500 (TR)1.2613.2549.3518.7917.79
Barclays US Agg Bond (TR)0.28-2.340.175.313.21
MSCI EAFE (TR)2.599.3646.887.2510.11

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.

Tax Cheaters — In September 2019, the government projected our nation’s tax gap, i.e., the difference between what all taxpayers should have paid compared to what they actually paid, was $441 billion per year. On April 13, IRS Commissioner Charles Rettig testified before the Senate Finance Committee the tax gap could be as high as $1 trillion annually, or more than double the previous estimate (source: IRS, BTN Research).

Wood — The average cost of building a new single-family home in the U.S. has increased by 8 percent in the last year ($24,000) solely because of the rising cost of lumber. Lumber mills shut down nationwide in 2020 for as long as four months, leading to a lumber shortage as homebuilding demand accelerated. Lumber imports into the U.S. have been impacted by a beetle plague ravaging Canadian forests (source: National Association of Homebuilders, BTN Research).

Half — 49 percent of the United States’ 330 million population maintain their health insurance through an employer’s health insurance plan either as an employee or a dependent of an employee (source: Kaiser Family Foundation, BTN Research).

WEEKLY FOCUS – Make Your Tax Refund Work for You

If you’re one of the millions of Americans receiving a tax refund this year, why not use that money to reap long-term benefits? The following seven options could make a lasting impact on your financial well-being:

  1. Having an emergency fund to cover basic living expenses is an important step to achieving your financial plans and keeping your retirement funds secure. If you don’t have six months of living expenses set aside in a high-interest savings account, use your tax refund to get closer to that goal.
  • If you have credit card debt, pay down your balance to get out of debt quicker. Then invest the money you save each month.
  • If your emergency fund is set and you don’t have high-interest debt, invest your tax refund in your retirement plan. If you want to reap the full benefits of compound interest, the sooner the better.
  • If there’s a course you’ve been wanting to take to boost your career, use your refund for tuition. Or, perhaps you have a hobby you’ve always wanted to turn into a side business. Why not use the money to create a website or build the inventory you need to get started?
  • Increase your home’s efficiency with new windows or appliances. You’ll save money on utility bills now and make your home more valuable when it’s time to sell.
  • Purchase a term life insurance policy to guarantee your loved ones an equal standard of living should tragedy strike.
  • Donate part or all of your tax refund to a charity and lower your taxable income in the process.

How you spend your money will ultimately depend upon your goals and individual financial situation. If you need help deciding your best route, 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 

May 2021 Monthly Outlook – Managing Risk – Dangerous Leap

“Risk is good. Not properly managing your risk is a dangerous leap.”  – Evel Knievel

We believe the strategic case for risk assets remains favorable, with ongoing support from: 1) economic reopening and normalization, 2) fiscal support, 3) pent-up savings, and 4) historically easy financial conditions. As we move into the post-COVID-19 world, we believe the recovery will be non-linear and the opportunity set highly dynamic.  We expect the economy to show superior growth for the balance of 2021, while the financial markets have already priced in a good deal of this growth.  The financial markets will need to contend with the potential for rising inflation driven by the economic growth and the potential for the FED to reduce monetary accommodation to fight inflation.   Come 2022, we expect economic activity to fall back into a normal range of 2%-3% per year. 

Chart of the week
Source: Goldman Sachs Global Investment Research and GSAM SAS Market Strategy

On the investing front, we are on alert as despite a barrage of positive economic data recently and amazingly positive corporate earnings reports, there has been a  pattern of sell-the-news profit taking in the past two weeks of April. It also comes at a time when defensive assets are showing relative strength compared to growth assets. The move isn’t large enough to break through recent support, but it was significant enough to establish a divergence between the movement of major market benchmarks and their volatility measures. This kind of price movement is typical when markets are faltering near highs. It implies that institutional investors often want to quietly slip out of their positions before the demand for stocks becomes too weak and creates a rush of sellers.  

The chart below shows that the S&P 500 Index and the Nasdaq 100 Index, have both showed a subtle pattern of higher highs over the past two weeks. Meanwhile, the Cboe Volatility Index (VIX), and the Cboe Nasdaq Volatility Index(VXN) are showing a pattern of higher lows (they should be showing a pattern of lower lows). This makes a subtle implication that market makers are a bit worried about the potential for falling prices.

That seems incongruous given the excessively positive data from both the private and the public sector that the economic recovery is progressing rapidly. But this is the kind of clue that experienced investors look for. When price action doesn’t follow what seems to be obvious for a given narrative, then we start to wonder if a larger, less obvious dynamic is building. It may not materialize into a full blown change of trend, but if it does do so, this is the kind of subtle warning the market might give.

Source: Investopedia

Therefore we have tightened our risk management thresholds while simultaneously shifting our portfolio allocations into areas that continue to show strength.

We hope you find this report informative.  Feel free to call us with any questions or concerns.  Please share this report with anyone you feel will benefit from it.

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

·      May is National Mental Health awareness month.  Nearly 44 million American adults, and millions of children, experience mental health conditions each year. Let’s all get educated on this issue and work towards acceptance and inclusion of people dealing with mental health issues.

May 5th                      Cinco De Mayo – stay thirsty my friends                 

May 9th                     Mother’s Day – wishing all mom’s, grandmothers, and great grandmothers a wonderful day. Hopefully soon we can get together to celebrate.

May 15th                   Armed Forces Day.  Dedicated to recognizing those presently serving in our armed forces

May 23rd                    My daughter Caryn’s birthday  

May 31st                   Memorial Day – let’s remember and give thanks to all who served our country

Jim

Sources: Investopedia, Bespoke Investment Group, Goldman Sachs

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 – April 26, 2021

For the Week of April 26, 2021

The Markets

Stocks rebounded Friday after dropping Thursday following reports President Biden planned to propose doubling capital gains taxes on individuals earning $1 million or more. But the S&P ended Friday close to its record high amid expectations of a strong earnings report this week. For the week, the Dow fell 0.42 percent to close at 34,043.49. The S&P lost 0.11 percent to finish at 4,180.17, and the NASDAQ dropped 0.25 percent to end at 14,016.81.

Returns Through 4/23/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)-0.4211.8647.8714.2616.30
NASDAQ Composite (TR)-0.258.9666.3026.5124.65
S&P 500 (TR)-0.1111.8051.9218.3317.12
Barclays US Agg Bond (TR)0.13-2.43-0.055.323.31
MSCI EAFE (TR)-0.417.4145.966.588.94
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.

Thirty-Something — The average age of a first-time U.S. homebuyer in 2020 was 36.1 years old (source: New York Fed Consumer Credit Panel, BTN Research).

Need a Charge? — The American Jobs Plan, a $2.3 trillion infrastructure plan proposed by the Biden White House on March 31, includes $174 billion (8 percent of the total plan) to be invested in the domestic electric vehicle market. Funds would be used to build and maintain 500,000 charging stations nationwide (source: Biden White House, BTN Research).

Money In, a Lot More Out — Halfway through fiscal year 2021, i.e., the 6 months ending March 31, 2021, the U.S. government has taken in $1.7 trillion in taxes and spent $3.4 trillion, resulting in a 2021 fiscal year deficit to date of $1.7 trillion with 6 months still to go in the fiscal year. Last year’s fiscal year 2020 budget deficit of $3.1 trillion was our nation’s all-time record (source: Treasury Department, BTN Research).

WEEKLY FOCUS – Without Umbrella Coverage, Your Assets Could Be at Risk

You’ve worked hard to build up your nest egg. But what would happen if you were involved in an accident, which left you liable for an amount above the limits of your homeowners or auto insurance? All your hard-earned assets could be gone over night.

To protect your savings, you may want to consider adding umbrella insurance to your homeowners and auto coverage. Also known as excess personal liability insurance, umbrella insurance provides an extra layer of security, which will pay for a judgment or settlement if you’re found responsible and cover your defense expenses even if you’re not at fault.

If you own property or items that could cause an injury to someone else, such as a pool, a dog, a trampoline, a boat, or a snowmobile, you should consider purchasing umbrella insurance. If you’re a landlord, serve on the board of a nonprofit, coach kids’ sports, or volunteer, you could also benefit from the protection offered by an umbrella policy.

Umbrella insurance is typically sold in increments of $1 million. The price of a policy will vary by risk and where you live. Because the insurance only pays if a claim exceeds the liability limit of your homeowners or auto insurance, coverage is generally affordable. You can expect to pay $150 to $300 per year for $1 million of coverage.

For an additional $100 to $200, you can add excess uninsured or underinsured motorist coverage, which covers you if you’re injured by another driver who doesn’t have enough coverage. For about $1,000 a year, you can tack on an endorsement that will provide additional protection from lawsuits if you serve as an officer or volunteer on a nonprofit board.

To keep premiums low, it’s best to purchase your umbrella insurance from the same provider you purchase your home and auto insurance from. It’s common for an insurance carrier to require you to have $250,000 in auto insurance and $300,000 of homeowners coverage before you can purchase an umbrella plan. (Make sure you don’t have a coverage gap between your original and umbrella policies.)

If you would like to learn more about umbrella insurance and other ways you can protect your finances, call us today to schedule an appointment.

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., broker-dealer and member of FINRA and SIPC. Investment advisory services offered through Securities America Advisors, Inc. and/or Arbor Point Advisors LLC, registered investment advisers. Securities America, Inc., Securities America Advisors, Inc., and Arbor Point Advisors LLC are separately owned and other entities and/or marketing names, products or services referenced here are independent. Securities America • 12325 Port Grace Blvd. • La Vista, NE 68128 • 800-747-6111 • securitiesamerica.com SAII# 3564999.1

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