February 2021

Posted on March 11th, 2021

Monthly Market Recap

Frankly, not much happened in the markets last month.  With a new President and Congress shifting power, it’s an odd time for nothing major to happen to impact the markets.  Our new President perhaps ushered something into our lives that you either love or hate…predictability.

Both U.S. and Foreign stock markets had a tiny pullback of 1%[1].  While the Fed assured the market that rates would stay low for longer, increased expectations of larger fiscal stimulus due to a Democratic President and Senate offset that and increased interest rates (as it will require more capital, and interest rates are, in effect, the cost of capital).  This brought bonds down slightly[2].  The stimulus expectations plus a decrease in COVID-19 cases, as well as vaccination timetables largely staying the same, allowed Smaller Cap stocks, which are more dependent on the U.S. economy and “Main Street” business than larger companies, to continue their significant rebound.[3]

The story of the month for us finance nerds was the GameStop fiasco.  It didn’t impact the market, but it sure kept us engaged.  In short, a Reddit forum member with a following orchestrated a short squeeze against a few hedge funds that were shorting GameStop, a brick and mortar retailer of video games that, prior to this month, no one paid much mind to.  Gamestop started the month around $17/share, popped up to almost $400/share and is, at the time of this writing, at $120/share.  The nuances, players, and conflicts of interest are fascinating, and I’d recommend googling… or hopefully reading the Michael Lewis novel when it comes out!

[1] S&P 500: -1%; MSCI Europe, Asia, Far East: -1%

[2] Barclay’s Aggregate Bond index: -.7%

[3] Russell 2000 TR: +5%

Opportunity Zone Investment Deadline Extended

By Anne Zavaglia, CFP® 

Typically, taxpayers that want to defer paying taxes on capital gains must reinvest their realized gain into a Qualified Opportunity Zone Fund within a 180 period after the date of sale.  Due to the pandemic, the 180 period was extended last year until 12-31-2020. 

The IRS has released a notice that further extends the deadline to March 31, 2021

Tax Documents Calendar

By Anne Zavaglia, CFP® 

The following is a list of when various tax forms will be ready for 2020, listed in order of when they will be released. Clients should reach out to us if they need help accessing forms.

Key Retirement and Tax Numbers for 2021

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key changes for 2021.

COVID-19 and the Importance of Disability Income Insurance

The prospect of being unable to work due to an illness or injury may seem remote to many of us, particularly during our younger working years. However, the COVID-19 pandemic has increased the chances of getting sick and not being able to work for an extended period, making disability income insurance (DI) more important than ever, regardless of your age.

Health insurance may pay for some of the medical expenses related to your illness, but it won’t cover your lost wages if you can’t work. And while many employers offer some form of sick leave, it may not last long enough to cover the length of time you can’t work. Disability income insurance pays a portion of your salary if you are unable to work due to an injury or illness. But will DI cover you if you can’t work due to COVID-19?

Are Value Stocks Poised for a Comeback?

Growth stocks have dominated the market for the last decade, led by tech giants and other fast-growing companies. While it’s possible this trend may continue, some analysts think that value stocks may have strong appeal during the economic recovery.1

No one can predict the market, of course. And past results are never a guarantee of future performance. But it may be helpful to consider these two types of stocks and the place they hold in your portfolio.