Hello Legacy Wealth Alliance Family,
Now that Easter is officially behind us, summer (and the heat) have seemingly returned. We hope everyone was able to enjoy the holiday weekend with family, friends, or appreciate a relaxing weekend to yourself! At this time last year, we had begun to see a slew of financial regulatory changes in response to the COVID-19 pandemic which included multiple stimulus packages and government acts. This year we are again reminded that things have not returned to the ‘status quo’. On March 17th, the IRS extended the 2020 Federal income tax-filing deadline to May 17th, 2021. This extension also delays the deadline until May 17th to make 2020 prior year contributions to a Traditional or Roth IRA. On April 1st after some delay, the Arizona state legislature approved pushing the tax-filing deadline back to May 17th to coincide with Federal extensions. As of this writing, the legislation is headed to Gov. Doug Ducey’s desk for signature on Monday, April 5th (1). Due to the uncertainty surrounding the state’s tax-filing deadline, we at Legacy Wealth Alliance will be collecting 2020 Traditional IRA & Roth IRA contributions through the end of this week. The deadline for our office to accept contributions will be end of business day (5:30pm) on Friday, April 9th. Anyone who desires to make a 2020 contribution after this period will be asked to send their payment directly to the financial institution that your account is custodied at. If you have questions on where to mail your check after April 9th or who to make this payable to, please contact our office.
Now the Capital Markets in Review
After the S&P 500 dropped 34% from its February 19th, 2020 closing peak of 3,386.15, the index closed out on March 23rd, 2020 at 2,237.40 (2), ending a selloff that included the quickest bear market in history and beginning the current bull market. We have seen the S&P 500 go onto rally somewhere near 80% through April 1st, 2021 since the March 2020 lows. Just last week, the index closed on Thursday above 4,000 for the first time in history marking yet another milestone for the overall US Equity Markets. We can all pause and reflect on the fact that it has been more than one-year since the pandemic was recognized domestically and the end of the equities bear market came and went….Because of this anniversary, we thought now would be a good time to look back at the financial market lessons learned from that difficult period. For us, there are three big items that summed up the past year:
Consumer Focused Policy – Both friendly Monetary (Federal Reserve) and Fiscal (US Government) policy helped consumers and businesses recover from unprecedented global pandemic-related shutdowns
The Financial Systems Resilience – In the face of a pandemic, causing the worst economic downturn since the Great Depression, and a difficult political and cultural environment, the financial system persevered
Global Ingenuity – Just like in previous economic downturns, there is a solution or solutions to any problem or challenge, ALWAYS
As we now look out at the current bull market and economic expansion, we remind you that both are quite young, and could have years to run.
In the nearer-term, we have seen signs of temporary market pressures beginning in mid-February through the end of March. These pressures on the market came from a handful of reasons including:
Treasury yields increasing and prospects of inflation
Month and quarter-end related portfolio re-balancing
Global COVID reopening and rising infection concerns primarily overseas
Economic data not surprising to the upside
Of course, there were many other news events last week impacting capital markets: a ship stuck in the Suez Canal, a hedge fund missing margin calls putting pressure on Chinese stocks, and automakers such as Ford, Jeep, and Dodge closing plants due to chip shortages – but this brief letter will not go into detail on any of these events.
Some analysts believe that the market is due for a pause to “refresh” and rest itself as it always does after a sharp up-swing. In other words, the market has had strong, quick price gains and is still trying to price itself out while the new economic expansion ensues. As there are always two sides to any story – we’d like to share the positive news stories we heard relating to the market last week: 1) Interest rates finally went down – the 10-year Treasury dropped to 1.67% from 1.74% (2) the week before, the first weekly drop in rates in some time; 2) The pace of vaccinations increased – as of the end of March, 158 million (3) vaccinations have been administered in the US alone and 617 million across 140 countries, at the rate of approximately 12.7 million/day (4); 3) The Federal Open Market Committee loosened restrictions on banks from distributing dividends (5); 4) And last but certainly not least the consumer confidence index had its biggest jump in 8 years (6). President Biden has also announced that his administration’s new goal is now to distribute 200 million vaccines in his first 100 days in office. We are hoping for those of you that have already been vaccinated this was an efficient and pleasant process!
As many of you know, the factors that impact the markets and subsequently your portfolios cannot be controlled by any one factor or person – the financial media, myself, Pattie, Todd, the President, Elon Musk and Redditt included. Most of the events and headlines mentioned in this brief letter will not matter to the markets in very short order as next week will arrive with new headlines and variables. We commit as always to construct your portfolios, base financial decisions and strategies on your goals, values and objectives and not based on day-to-day headlines. This week as we enter a new season and new quarter, we ask you all to do one quick exercise – draw two circles that overlap one another creating a Venn Diagram – in the left circle title this ‘Things That Are Important’ and in the right circle title this ‘Things That I Control’. The list of things that you can convincingly put in the middle circle (for me this was a short yet focused list) are the ones you should commit your time and energy to. Everything else can be tuned out as things out of your control!
We sincerely hope everyone enjoyed their Easter weekend and send our best wishes to everyone in Q2!
Sincerely,
Jon Launder, CFP®
LFS-3524599-040221
- 12news.com/local
- Yahoo Finance – Historical Data
- covid.cdc.gov /covid-data-tracker
- ourworldindata.org/covid-vaccinations
- federalreserve.gov/newsevents
- https://conference-board.org/data/consumerconfidence.cfm
This information does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may view this information. Statements, opinions, and forecasts made represent a particular observation and assessment of the market environment at a specific point in time and are not intended to be a forecast of future events or a guarantee of future results. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended. Statements regarding future prospects may not be realized and may differ materially from actual events or results. Past performance is not indicative of future performance.
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8950 S. 52nd Street, Ste. 204
Tempe, Arizona 85284
480.212.7000 (Office)
480.212.7002 (Fax)
Please do not send any trading or transaction instructions through this email as they will not be executed. If you need to place a trade, please contact our office directly or the Trading Desk at 800-237-3813. Todd Martin is an Advisory Representative offering investments and advisory services through Lincoln Financial Securities Corporation, Member SIPC. Insurance is offered through Legacy Wealth Alliance, located at 8950 South 52nd Street, Ste. 204, Tempe, AZ 85284. Lincoln Financial Securities Corporation and Legacy Wealth Alliance are not affiliated. If you do not wish to receive emails from me, please call me at 480-212-7000, email me at jon@legacywealthalliance.com or write to me at 8950 S. 52nd Street, Ste. 204, Tempe, AZ 85284. Lincoln Financial Securities and its representatives do not offer tax or legal advice. Individuals should consult their tax or legal professionals regarding their specific circumstances. LFS-2552197-052219.
See Lincoln Financial Securities (LFS’) Form CRS Customer Relationship Summary, available here, for succinct information about the relationships and services LFS offers to retail investors, related fees and costs, specified conflicts of interest, standards of conduct, and disciplinary history, among other things. LFS’ Forms ADV, Part 2A, which describe LFS’ investment advisory services, Regulation Best Interest Disclosure Document, which describes LFS’ broker-dealer services, and other client disclosure documents can be found here.
