Highlights of the SECURE Act
March 1, 2020
Think Twice Before Taking a Retro SSI Benefit
May 1, 2020
By Brett Freese
Market Highlights:
- Stocks had a very weak 1st quarter in both the US and Internationally. Interesting note: US Large Cap stocks outperformed US Small & Mid Cap, Emerging Markets, and International Developed Markets
- Bonds were mixed with positive returns for Short-term Government, but there were losses in Corporate Bonds and Municipals
- Gold strengthened this quarter ending around $1600 an ounce
Economic Notes:
- COVID-19 has caused people, businesses, and governments to shut down many parts of the economy in March
- We had an unprecedented $2 trillion COVID-19 Stimulus Bill
- Federal Reserve lowered the Federal Funds rate target range to a historic low of 0.00 – 0.25%. Note: The Federal Reserve has a dual mandate to achieve both stable prices and maximum sustainable employment
- In terms of business there will be winners, losers, survivors and new startups due to the virus’ impact. Strategy and diversification will be key
- The global stock market losses started on February 20 and we have been on a roller coaster ride ever since
- On Tuesday March 24th the Dow soared more than 11% in the biggest one day jump since 1933
Historical Stock Market Declines:
Market declines and inclines rarely look the same or even feel the same, but they do happen and the ups and downs are a part of the process – It is important to have a plan/strategy so emotions don’t dictate buying or selling.
A 5% or greater loss occurs about 3 times a year
A 10% or greater loss occurs about once a year
A 15% or greater loss occurs about once every 2 years
A 20% or greater loss occurs about once every 3.5 years
Please know that when stock prices go down the “market collapse gurus” receive the most air time. Likewise, when stock prices go up all the “bull market gurus” talk about how the market will continue to be up BIG. Please know that most “gurus” are great with hindsight to justify how important it is to have their voice heard.
Market Scorecard for the last 13 weeks ending 3/30/2020:
US Equities:
-18.05% S&P 500 (Index of the largest US publicly traded companies)
-30.29% Russell 2000 (Index of 2000 Small-cap US publicly traded companies)
Global Equities:
-24.31% Foreign Large – Morningstar Category
-26.81% World Small/Mid Stock – Morningstar Category
US Bonds:
-6.21% Corporate Bond – Morningstar Category
+2.06% Short Government – Morningstar Category
-1.01% Muni National Bond Index – Morningstar Category
Other:
-4.79% World Bond – Morningstar Category
+7.00% LBMA Gold Price
Market Indicators:
Inflation:
2.33% as of 03/20/20 (Up 0.28% from 2.05% in December)
Unemployment:
3.50% as of 03/06/20 (Flat from 3.5 in December)
Fed Funds Target Rate:
0.00 -0.25% as of 03/30/20 (Down from 1.50 – 1.75% on 12/24/19)
Suggested Next Steps:
- Understand that market cycles are normal. The markets go up and down in mostly unpredictable directions and amounts. The ups and downs of investments many times seem to make sense only after they happen, however, market prediction is very difficult. (i.e. the next stock market crash has been predicted every year since 2008).
- Your investments are just one factor in the success of your life, money, and purpose. Make sure that you are confident in your full financial plan, so you can successfully have an amazing ROL (Return on Life).
- Your investment allocation and diversification are important factors in both risk management and future returns. Therefore, if you have questions about your investment plan, please schedule a phone or in-person meeting with your TrustWell Financial Advisor(s).
