I hope everyone is staying safe and healthy.
Last week my family and I took a welcome break. We spent the week visiting with other family members. Everyone had a good time. After we returned, our family celebrated my lovely wife’s birthday. Happy Birthday, Diana!
The market continues to march higher. The economy has rebounded some from the second quarter’s dismal results. But it is much weaker now than it was pre-pandemic. This week’s first article shares some explanations for this apparent disconnect.
U.S. equity markets continue to benefit from stronger economic data and hopes for a COVID vaccine is found sooner rather than later. The number of new COVID cases have fallen from their highs, but a look at the underlying data gives some pause for concern. Positive test rates in many southern states remain elevated. In some states, they still exceed 10%.
As of Thursday’s, close, the S&P 500 Index is up 8.2% year-to-date. On Thursday, the market set both intraday and closing highs. The S&P also finished Thursday 3.2% above its pre-pandemic high set on February 19th.
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Here are the links to this week’s articles as well as a brief description of each:
1. ’Main Street Is the Now, Wall Street is the Future’: Why the Stock Market Is Surging as the Economy Struggles. The market and the economy do not always move in sync with each other. That has never been clearer than this year. This article outlines several reasons why Wall Street has done well while Main Street has struggled (as well as some reasons its upward path could reverse):
· The Market’s Big Guns
· Help From Washington
· The Nature of the Market
For more on this topic, you may also want to read: Why Markets Don’t Seem to Care if the Economy Stinks and In a Bleak Economy, These Companies Are Flourishing.
2. The Workforce Is About to Change Dramatically. In March, the pandemic forced many employees in industries such as tech, finance, and media to start working from home. It seems unlikely this will change dramatically any time soon. According to surveys cited in the article, when the pandemic ends, 15%-20% of workers will continue to work from home on at least a part-time basis. What does this mean for our economy, our workforce, and our politics?
3. Debunking the Myth of Lower Taxes in Retirement. Lowering your tax bill leaves you with more money to spend today or to save for tomorrow. We often expect our tax bill to fall when we retire. It may not happen that way. When we retire, we shift from the accumulation phase to the distribution phase (spending what you save). Proper planning can help you lower the tax cost of withdrawing funds from your retirement accounts. If you would like to discuss ways you can lower the taxes paid as you withdraw money from your retirement accounts, please schedule a free 15-minute call.
4. Working From Home Increases Productivity. Working from home provides some benefits and can improve productivity. It reduces commuting time. It can also lead to a healthier lifestyle. It can provide more flexibility. Unfortunately, your work-life balance may suffer. The article also suggests some ways you can improve your productivity.
5. Keep Reminding Clients About the Importance of Being a Fiduciary. There are two types of advisors: fiduciaries and non-fiduciaries. Legally, fiduciaries must put the interests of clients first. Non-fiduciaries do not have this requirement. Apprise provides a Fiduciary Oath to emphasize how important I believe it is to work with a fiduciary. If you want to hire an advisor, I can’t stress the importance of working with a fiduciary enough. One of the clients of this article’s author had to do business with a non-fiduciary after his mother died. The lessons learned were quite expensive. Millions of dollars were lost to bad investments, probate fees, excess accounting fees, and advisory fees. If you want to hire an advisor, make sure you hire a fiduciary advisor.
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Phil Weiss founded Apprise Wealth Management. He started his financial services career in 1987 working as a tax professional for Deloitte & Touche. For the past 25+ years, he has worked extensively in the areas of financial planning and investment management. Phil is both a CFA charterholder and a CPA.
Located just north of Baltimore, Apprise works with clients face-to-face locally and can also work virtually regardless of location.
