September 2020 AAM Newsletter
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If you are a client of mine, thank you for your continued business and please update me on any changes in your situation do that I can make the appropriate changes to your financial plan and investments.
If you are not a client please consider giving me a call or emailing me if you would like to begin a plan to get you to your financial goals. I consider myself different from many of the advisors out there for the following reasons:
1) You will not be pressured to purchase any products because I am a fee-only advisor and a NAPFA® Member (no commission sales)
2) You will have a comprehensive financial plan completed by a Certified Financial Planner ™ Practitioner or CFP® – I have committed to financial planning and continuing education.
3) You will have a reasonable fee for the services performed. I charge less than the typical large financial planning firm by being a small shop and keeping my business expenses low.
Ronald J. VanSurksum, CFP®
Please see below for financial articles and tips
Stocks enjoyed the best August in decades as hopes for a Covid vaccine by year end continue while the economy and corporate earnings rebound from the shutdown.
Index performance Aug 2020____ YTD 2020_
- The S&P index +7.01% +8.34%
- Dow Jones industrial 30 +7.57% -0.38%
- The NASDAQ Index +9.59% +31.24%
- The Russell 2000 Small cap +5.50% -6.39%
- EAFE International Index +4.67% -6.47%
- The US Dollar -1.40% -4.53%
- Oil +5.81% -30.22%
- Gold -0.28% +29.71%
- 10-Year Treasury Yield 0.71% 1.91% on 12/31/2019
- 30-Year Treasury Yield 1.47% 2.36% on 12/31/2019
Volatility was moderate in August for the S&P 500 index. The index began at 3,271 rose to a high of 3,508 on 8/28 before settling at 3,500 to end of the month for a difference of 237 points or about 7.2% from low to high.
Like last month, technology and growth stocks continue to lead the market higher while value, small cap and international stocks lag behind. A small handful of large cap tech stocks have provided most of the markets gain this year. I am hopeful that the remainder of the market can begin to catch up as the economy recovers.
Gold and the US dollar slipped while oil and treasury yields surged higher in August.
We recently was a little pullback in the markets, especially the tech stocks. This is to be expected and could be the beginnings of the rotation into value stocks. We remain diversified to take advantage of whatever the markets bring us.
Please contact me if you have questions or simply just wish to talk. I am back in the office doing in-person meetings and I will still do meetings over the phone or computer if you are more comfortable with that.
Recent US Economic Data
US Manufacturing –ISM manufacturing rose and beat expectations.
Jobs – The August payroll report added a less than expected 1.37 million jobs, unemployment fell to 8.4% which was more than expected while average hourly earnings rose 0.4% and beat expectations.
Housing Prices –FHFA home prices rose while Shiller home prices rose but missed expectations.
Housing starts – Both housing starts and building permits rose and beat estimates.
Existing home sales – Rose and beat estimates.
GDP – 2Q GDP second estimate was revised a little better than expected.
Retail Sales – Rose but missed estimates.
Leading indicators – Rose and beat expectations.
Durable goods orders – Rose and beat estimates.
Inflation data was mostly higher – producer prices rose more than expected, consumer prices rose more than expected, import prices and export prices both rose while PCE prices rose a little less than expected.
For weekly market updates please visit my blog at www.aamllc.com
Mortgage rates were mixed over the last month. The national average on mortgage as per Bloomberg.com shows the 15-year rate is now at 2.56% and the 30-year rate is at 3.06%. These rates are as of 09/10/2020 and may include points.
CD rates were also mixed over the last month. Charles Schwab has access to CD’s from banks all over the country. Here are some of the current CD rates offered.
6 mo CD @ 0.05% 1-Yr CD @ 0.15%
2-Yr CD @ 0.20% 5-Yr CD @ 0.45%
Tips and Suggestions
The next quarterly estimated tax payments are due 09/15/2020 for the 3rd quarter of 2020.
Time to check your retirement contributions. Develop a cash flow plan to maximize your health savings account, 401k, 457, 403b or IRA contributions for 2020.
Retirees do not have to take their required minimum distributions in 2020 due to Covid tax changes. Now is a good time to review your tax plan to decide what makes the most sense for you.
It is time to plan for 2021! What would you like to accomplish next year? How much to you want to save and home much do you need to save to reach your financial goals?
Is your estate plan up-to-date? This is a good time to review your estate plan and update your beneficiary designations.
Do you have children age 18 years or older? You may want to plan for an emergency by obtaining HIPPA authorizations or power-of-attorney so that you can get health information, if needed.
ABLE accounts are now available in the State of Michigan. ABLE accounts are for certain individuals with disabilities to accumulate funds for their long-term needs without disqualifying themselves for Medicaid. Check it out at www.miable.org or give me a call.
When is the last time you reviewed your insurance plan? Is your disability income keeping up with your income? Do you have any term life insurance policies expiring soon? Do you need additional coverage or less coverage? Let’s discuss.
Are you on track to meet your financial goals? Do you have a plan to get you where you want to be? If you do not you may not reach your goals. Let’s make a plan to Maximize your financial potential.
Do you need a debt payoff plan? Let’s work on one together.
Need help with your 401k? I am now using GoToMeeting.com to allow me to help review your 401k online and help you rebalance. We can access the plan together online, I can give you control to log in and then we can discuss and make changes together. Let me know if you want to discuss!
Are your cash reserves earning less than 1%? Consider a short-term US treasury fund, municipal bond fund or corporate bond fund to give your secondary cash reserves a yield boost.
If you have any questions or if you would like to have help with your financial plan please give me – your Fee-only Certified Financial Planning ™ Practitioner – a call.
Work on Your Financial Plan:
View Your Schwab Accounts: www.schwab.com
Check your risk tolerance:
All articles are now found on my website blog: www.aamllc.com
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Contact MeDo you want more information on how I can help you? Give me a call or drop me an email to review or set up a free initial consultation.