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 2/12/21	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	1.11	3.00	8.94	11.08	17.27
NASDAQ Composite (TR)	1.74	9.44	46.18	27.66	27.93
S&P 500 (TR)	1.28	4.94	18.56	16.21	18.42
Barclays US Agg Bond (TR)	-0.13	-1.23	4.44	5.62	3.81
MSCI EAFE (TR)	2.37	5.04	13.59	5.82	10.88

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.   

Returns Through 2/05/21	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	3.90	1.87	8.79	11.11	16.72
NASDAQ Composite (TR)	6.04	7.57	47.03	27.04	27.35
S&P 500 (TR)	4.67	3.61	18.70	15.85	17.95
Barclays US Agg Bond (TR)	-0.39	-1.11	4.84	5.49	3.87
MSCI EAFE (TR)	2.75	1.66	10.36	4.22	9.77

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.

For the Week of January 19, 2021

The Markets

U.S. stocks fell Friday following disappointing retail sales data and big bank earnings reports. Investors also feared President-elect Joe Biden’s ambitious stimulus plan could result in tax hikes or higher interest rates. For the week, the Dow fell 0.91 percent to close at 30,814.26. The S&P lost 1.46 percent to finish at 3,768.25, and the NASDAQ dropped 1.54 percent to end at 12,998.50.

Returns Through 1/15/21	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	-0.91	0.73	8.59	8.59	16.79
NASDAQ Composite (TR)	-1.54	0.87	41.63	22.66	25.03
S&P 500 (TR)	-1.46	0.39	16.66	12.74	17.23
Barclays US Agg Bond (TR)	0.19	-0.76	6.00	5.25	4.07
MSCI EAFE (TR)	-0.30	1.59	8.40	3.33	10.04

Debt — The U.S. increased its national debt by $7.77 trillion in the last four years. The U.S. increased its national debt by $7.67 trillion in the previous seven years (source: Treasury Department, BTN Research).

Housing — The average interest rate nationwide on a 30-year fixed rate mortgage was 2.76 percent at the end of 2020. The all-time record low national average is 2.66 percent, set just one week earlier on Dec. 24 (source: Freddie Mac, BTN Research).

Where Does This Money Come From? — The Fed is buying $120 billion of bonds each month – $80 billion of Treasury debt and $40 billion of mortgage-backed securities. The Fed confirmed on Dec. 16 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).

WEEKLY FOCUS – Don’t Put Autopay Bills on Autopilot

The majority of Americans have embraced the convenience of online, automatic bill payments. Autopay can save time, reduce clutter, and prevent missed payments, which may impair credit scores or lead to penalties. It also offers more control – allowing us to schedule the payment – compared to not knowing when a check will arrive or be cashed.

Still, you should be aware of potential downsides. Knowing bills will be paid on time can make us less vigilant in tracking spending, or watching for unexpected price increases or fraudulent charges. With autopay, it’s easy to forget the date when a service or subscription automatically renews. And once something renews, it may be challenging to reverse.

It can be a chore to re-enter account information on multiple websites every time you change the credit card or checking account you’re using for payments. Finally, while automatic electronic payments are generally more reliable than manual payments, they’re not totally foolproof. Occasional glitches could result in added fees or loss of service.

You can take a few measures to reduce potential problems. If you have the option when you set up bill pay, choose to be notified by text or email before payments go through. When you cancel a service, make sure to monitor your statement to verify payments are stopped promptly. To keep things simple, you may want to reserve autopay for bills with regular, fixed charges.

Using a credit card for auto payments reduces the possibility of overdrawing your checking account, may allow you to accumulate points, and provides added protection against fraudulent or disputed charges. But benefits need to be weighed against the risk of not tracking expenses as closely and incurring interest charges if your balance isn’t paid in full each month.

On the other hand, if you pay a credit card with automatic payments from your checking account, consider choosing the minimum payment option to prevent the possibility of overdrawing your account.  Then when it’s convenient, manually pay any outstanding balance to avoid interest charges. Whether you use a checking account or a credit card for your automatic payments, go through your statement at least once or twice a month to ensure everything is in order.

We are always available to help you look for ways to safeguard your money and protect your financial credit. Feel free to contact our office to set up an appointment to discuss any concerns or questions you may have.

For the Week of January 11, 2021

The Markets

Stocks closed higher Friday, with the S&P at a record high, despite the Capitol riots and a negative jobs report. Investors appeared buoyed by President-elect Joe Biden’s comment that he would support an economic stimulus package in the trillions of dollars, which would include unemployment benefits and rent forbearance. For the week, the Dow rose 1.66 percent to close at 31,097.97. The S&P gained 1.88 percent to finish at 3,824.68, and the NASDAQ climbed 2.45 percent to end the week at 13,201.98.

Returns Through 1/08/21	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	1.66	1.66	10.70	9.67	16.49
NASDAQ Composite (TR)	2.45	2.45	45.89	23.89	24.57
S&P 500 (TR)	1.88	1.88	19.76	13.84	17.06
Barclays US Agg Bond (TR)	-0.94	-0.94	6.41	5.12	4.10
MSCI EAFE (TR)	3.16	3.16	11.67	4.56	9.50

Long Term — The S&P 500 has gained an average of 10.9 percent per year (total return) over the past 50 years. The index has been positive in 16 of the last 18 years. Over the long-term, the S&P 500 has been up during 40 of the last 50 years (source: BTN Research). 

Jobless — The lowest (3.5 percent) and the highest (14.7 percent) unemployment rates in the United States in the last 50 years both occurred in 2020, and they took place just two months apart (source: Department of Labor, BTN Research).

Every Day — An estimated 10,800 Americans will turn 65 years old each day in 2021. That’s one every eight seconds. This group represents the 11th year of 19 years of baby boomers turning age 65. An estimated 11,500 Americans will turn 65 years old each day in 2029 (source: Government Accountability Office, BTN Research).

WEEKLY FOCUS – Quick Facts About the New Stimulus Package

In late December, Congress passed a $900 billion stimulus package, which included $600 checks to qualifying citizens. After initially refusing to sign the bill unless the checks were increased to $2,000, President Trump signed it. Although the House voted to increase the checks, the Senate didn’t pick up the vote, leaving the original package unchanged. Some highlights from the bill include:

The IRS and the Treasury have already started direct deposits. Recipients who don’t have direct deposit set up with the IRS will receive physical checks or Economic Impact Payment cards – provided the IRS gets to them by January 15. Those the IRS doesn’t get to by that cutoff date will need to claim a recovery rebate credit when they file their taxes.

Qualifications for this bill’s checks differ from the CARES Act in a few ways. Eligibility is determined based on 2019 tax returns (compared to 2018 or 2019 with CARES). To receive a full payment, an individual can’t have a 2019 adjusted gross income (AGI) above $75,000; married couples can’t have an AGI above $150,000, and a head of household’s AGI can’t be over $112,500. Eligible parents will receive checks for children under the age of 17.

People with higher incomes will receive a partial payment, which declines by $5 for every $100 of income over the full-payment limits. So, individuals with income of $87,000 and above and married couples filing jointly with $174,000 will not receive payments.

The IRS answers questions about the second stimulus checks and provides a tracking option at https://www.irs.gov/coronavirus/economic-impact-payments.

Other provisions from the 5,600-page bill include:

• Individuals drawing unemployment benefits will receive an extra $300 a week through March 14.
• Some hard-hit small businesses may be able to apply for a second Paycheck Protection Program loan.
• Employers deferring payroll taxes under the President’s executive action have until the end of 2021 to increase employees’ withholding to pay back taxes owed.
• The $300 above-the-line deduction for cash contributions to qualified charities is extended through 2021.

If you have questions on how the bill may affect you or other financial concerns, don’t hesitate to call.  

We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

For the Week of January 4, 2021

The Markets

U.S. stocks rose on the final trading day of a tumultuous year. Amid pandemic-related closures and a global recession, equities plunged into a bear market in February and March but quickly rebounded. The Dow and the S&P 500 broke their records Thursday, and the NASDAQ’s year-to-date gains were the strongest of the three indices. For the week, the Dow rose 1.35 percent to close at 30,606.48. The S&P gained 1.45 percent to finish at 3,756.07, and the NASDAQ climbed 0.66 percent to end the week at 12,888.28.

Returns Through 12/31/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	1.35	9.72	9.72	9.90	14.65
NASDAQ Composite (TR)	0.66	44.92	44.92	24.39	22.12
S&P 500 (TR)	1.45	18.40	18.40	14.18	15.22
Barclays US Agg Bond (TR)	0.22	7.51	7.51	5.34	4.44
MSCI EAFE (TR)	1.40	0.00	7.81	4.28	7.45

I Need My Space — In 2020, 28 percent of the households in the United States were made up of just one individual living alone. Another 35 percent of households were made up of just two people, of which 65 percent (of the 35 percent) are a married couple (source: Census Bureau, BTN Research).

The Fed — Four of the six current members of the Federal Reserve’s Board of Governors – Richard Clarida, Randal Quarles, Michelle Bowman, and Christopher Waller – were appointed during President Trump’s four years in office. There remains one vacancy on the seven-member Board of Governors (source: Federal Reserve, BTN Research).

All for Exactly the Same Services — Private U.S. health insurance pays on average $241 for health care services for every $100 that Medicare pays and for every $72 that Medicaid pays (source: RAND, Health Affairs, BTN Research).

WEEKLY FOCUS – Why You Should Set Up Your Online Social Security Account

For many of us, Social Security plays an important part in our financial plans for retirement or later stage of life. So even if you’re years away from applying for benefits, there are good reasons to set up your online Social Security account at http://www.socialsecurity.gov/myaccount.

You can go online to ensure there aren’t any gaps in your earnings. Why is that important? Because the amount you receive from Social Security will be based on how much you’ve earned over your working career. Many people change jobs frequently, increasing the possibility an employer will fail to report their earnings, use the wrong Social Security number, or use an incorrect name. In fact, it’s estimated Social Security records have a 3 percent error rate.1 If there is a mistake, you’ll want to fix it as soon as possible, so you aren’t shortchanged when you finally apply for benefits.

You may protect yourself against fraud. By setting up an online Social Security account, you’ll prevent anyone else from doing so. Much like income tax fraud, identity thieves sometimes set up Social Security accounts and file for benefits using other people’s names. You don’t want to wait until you retire to find someone else is collecting your hard-earned benefits. The most effective way to prevent that is by creating your own account.

You can easily replace a lost or stolen Social Security card – for free. With an online account, there’s no need to sit through traffic to get to your local office and wait in line for a new card. You can also download a printable copy of your Social Security 1099/Benefit Statement, the tax form the Social Security Administration mails each year in January. No need to wait.

If you already receive Social Security, you can still benefit from having an online account. You can set up or change direct deposit or address information and get a benefit verification letter, which you may need if you’re applying for a loan. You’ll also be able to check the status of your Social Security benefit application from anywhere you can safely log in to your account.

If you’re wondering about the role of Social Security benefits in your retirement plans or how much income you’ll need in retirement, call our office. We can help you evaluate your financial plan to ensure you’re on track to work toward the retirement you envision.

1. https://www.cbsnews.com/news/online-my-social-security-account-fights-id-theft/

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 12/25/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	-0.34	8.27	8.35	9.36	14.18
NASDAQ Composite (TR)	0.32	43.97	44.30	23.79	21.77
S&P 500 (TR)	-0.49	16.71	17.01	13.51	14.70
Barclays US Agg Bond (TR)	0.08	7.27	7.38	5.44	4.38
MSCI EAFE (TR)	-0.60	6.33	6.83	4.11	7.12

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

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 12/11/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	-0.54	7.70	2.56	9.72	14.44
NASDAQ Composite (TR)	-0.69	39.14	5.10	22.90	21.50
S&P 500 (TR)	-0.95	15.39	2.71	13.43	15.00
Barclays US Agg Bond (TR)	0.35	7.21	0.90	5.32	4.25
MSCI EAFE (TR)	-0.51	4.87	4.24	3.96	7.20

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.

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 12/04/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	1.16	8.28	11.87	10.09	13.82
NASDAQ Composite (TR)	2.14	40.10	46.84	23.79	20.67
S&P 500 (TR)	1.72	16.50	21.08	14.10	14.35
Barclays US Agg Bond (TR)	-0.42	6.84	6.78	5.20	4.28
MSCI EAFE (TR)	1.02	5.41	9.25	4.21	6.79

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.

For the Week of November 30, 2020

The Markets

Stocks rose on a shortened, post-Thanksgiving Friday as retailers kicked off the holiday shopping season and coronavirus cases rose. The S&P and NASDAQ closed at record highs Friday, and the Dow closed above 30,000 for the first time earlier in the week. For the week, the Dow rose 2.25 percent to close at 29,910.37. The S&P gained 2.30 percent to finish at 3,638.35, and the NASDAQ climbed 2.97 percent to end at 12,205.85.

Returns Through 11/27/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	2.25	7.04	8.68	10.80	13.64
NASDAQ Composite (TR)	2.97	37.16	41.50	22.31	20.23
S&P 500 (TR)	2.30	14.52	17.53	14.02	13.98
Barclays US Agg Bond (TR)	-0.03	7.28	7.21	5.30	4.34
MSCI EAFE (TR)	2.23	4.34	7.20	3.78	6.40

Why Go? — 43 percent of recent college graduates with jobs (under the age of 28) surveyed in September are working in jobs that typically do not require a college degree (source: Federal Reserve Bank of New York, BTN Research).

People Are Spending Again — Retail sales in the United States were down on a month-over-month basis for three consecutive months (February through April) but have rebounded and have increased on a month-over-month basis for the last six months (May through October) (source: Census Bureau, BTN Research).

Not Coming Back — In the six months from February 29 to August 31, 163,735 U.S. businesses closed their doors, including 97,966 businesses (60 percent) that are likely closed for good (Source: Yelp Economic Average, BTN Research).

WEEKLY FOCUS – December 1 Designated Giving Tuesday

Whether it’s due to the holiday spirit or taking advantage of tax deductions before it’s too late, one-third of annual charitable donations are made in December.¹ Just as you try to be a mindful shopper who avoids impulse purchases, it’s important to be a careful giver who thoughtfully evaluates emotion-tugging appeals. The following tips can help.

Plan ahead. You can’t buy gifts for every friend and relative, and you can’t donate to every worthy cause. So consider what areas you’re most passionate about. And don’t be like two-thirds of donors, who don’t do any research before giving.² Examine prospective charities and choose groups who address your concerns most effectively and efficiently. Check out large organizations on charity rating sites like GuideStar.org, CharityNavigator.org, or the Better Business Bureau Wise Giving Alliance site, Give.org. Evaluate smaller, local nonprofits by reading their annual report, audited financial statement, and IRS Form 990. Look for entities that spend 75 percent of their budgets directly on programs. You might even volunteer and observe their programming in action.

Concentrate support. After you’ve identified charities with reputations for performing well, narrow your choices. Although diversification works well when investing in stocks, it’s less effective when investing in charities. Giving more to fewer organizations allows them to spend less on fundraising, keep operating costs low, and plan strategically.

Budget for giving. Once you’ve chosen your favorite nonprofits, decide how much you want to give and make room in your budget. See if you can make your gifts go farther by participating in a matching program through your employer or a generous donor.

Be tax smart. You can’t deduct donations unless you itemize your tax return and give to a 501(c)3 tax-exempt entity. (To check whether a charity qualifies, visit the IRS webpage, apps.irs.gov/app/eos). If you receive something in return for your gift (e.g., a dinner or a book), its value must be subtracted from your donation. A cancelled check or credit card statement is adequate proof for gifts under $250, but you’ll need a receipt for gifts above that.  

For more information on targeting your charitable efforts, give our office a call. We can also work with your tax advisor to help you and your causes get the most benefit from your gifts.

We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

^1,2 https://neonone.com/resources/blog/year-end-giving-statistics/

For the Week of November 23, 2020

The Markets

Stocks closed lower Friday amid rising coronavirus cases, increased state-level shutdowns, and fiscal stimulus developments. On Thursday, U.S. Treasury Secretary Steven Mnuchin said he would allow pandemic-relief lending programs to expire at the end of the year. For the week, the Dow fell 0.65 percent to close at 29,263.48. The S&P lost 0.73 percent to finish at 3,557.54, and the NASDAQ climbed 0.25 percent to end the week at 11,854.97.

Returns Through 11/20/20	1 Week	YTD	1 Year	3 Year	5 Year
Dow Jones Industrials (TR)	-0.65	4.69	7.68	10.23	13.12
NASDAQ Composite (TR)	0.25	33.21	40.31	21.64	19.64
S&P 500 (TR)	-0.73	11.95	16.60	13.45	13.49
Barclays US Agg Bond (TR)	0.59	7.31	7.26	5.41	4.37
MSCI EAFE (TR)	1.87	2.06	5.71	3.50	5.83

More Bonds Than Stocks — As of June 30, the U.S. stock market was $33 trillion in size. As of that same date, the U.S. bond market was $50 trillion in size (source: Wilshire, SIFMA, BTN Research). 

Bulls — 56 percent of investors surveyed as of Nov. 11 are bullish on U.S. stocks for the upcoming six months, the highest percentage recorded in this weekly survey since Jan. 3, 2018 (source: Amer. Assoc. of Individual Investors, BTN Research).

Taxes — To take deductions on Form 1040, a taxpayer can use the standard deduction or the taxpayer can itemize deductions if the latter is greater than the former. The standard deduction will be $25,100 for married couples filing jointly and $12,550 for individuals in 2021. Please consult a tax expert for details (source: IRS, BTN Research).

WEEKLY FOCUS – Safe Holiday Shopping in 2020

In a year unlike any other, holiday shopping is sure to look different as well. According to Deloitte’s 35^th annual holiday shopping survey, the average household expects to spend $1,400 this season, 7 percent lower than last year. Participants cited economic worries for reigning in their overall spending and safety concerns for reducing travel and socializing outside the home. Not surprisingly, over half plan to do more online shopping.

Unfortunately, increased online shopping leads to increased online scams. Here are a few tips to follow if you’re considering a purchase off the beaten path.

While online shopping may offer fewer impulse-buying temptations than in-store experiences, it’s still important to create a disciplined budget for gift giving. From holiday spending to college funding and retirement planning, our office can be a resource for your financial needs. Call us for assistance when you need to create or update a plan for achieving your financial goals.