Our Writings

October 2020

Monthly Market Recap

from Clint Edgington, CFA

This quarter enjoyed broad economic optimism, as jobless claims decreased (though obviously still elevated), manufacturing continued its rebound, and COVID-19 case counts decreased off the summer highs with continued positive news on the vaccine front.  U.S. stocks outperformed European stocks as the European continent began experiencing their own COVID-19 surge.  Growth stocks, particularly the technology sector, have been impacted less by the COVID-19 shutdowns and therefore outperformed Value stocks.

The heady optimism of August was tempered in September, however, as case counts plateaued, stimulus talks hit legislative logjams, and apprehensions over a fall COVID-19 resurgence with schools resuming and more time spent indoors resurfaced.  As previously discussed, Federal Reserve Chairman Jerome Powell’s Jackson Hole speech and position papers indicating the Federal Reserve’s intention was to keep rates lower for longer pushed Value stocks to outperform Growth for the month.

Why You May Want to Consider a Roth Conversion Now

By Anne Zavaglia, CFP® 

Tax policy will play a big role in the election.  The current tax rates are due to sunset after 2025.  That means for most taxpayers, there will be an increase in taxes in the future.  Should there be a change in administration after this election season, there is a possibility the rates will sunset sooner, and other tax cuts may be rolled back for top income earners. In general, the low tax rate environment coupled with the elimination of the stretch IRA has created favorable conditions for Roth Conversions.

Are You Donating to Charity this Year?

By Anne Zavaglia, CFP® 

Tax payers that itemize deductions on their federal income tax return can generally deduct gifts to qualified charities. The 2017 tax reform significantly increased the standard deduction resulting in far fewer taxpayers reducing their taxes by itemizing deductions.  To encourage charitable giving and provide a bit of tax relief, the Coronavirus Aid, Relief, and Economic Security (CARES) Act created two temporary changes to the limits on charitable contributions.

Is It Time to Think About Tax-Free Income?

Federal and state governments have spent extraordinary sums in response to the economic toll inflicted by the COVID-19 pandemic. At some point it is likely that governments will look for ways to increase revenue to compensate for this spending and increase income taxes as a result. That’s why it might be a good time to think about ways to help reduce your taxable income. Here are three potential sources of tax-free income to consider.

Medicare Open Enrollment: It’s Time to Review Your Coverage

During the Medicare Open Enrollment Period that runs from October 15 through December 7, you can make changes to your Medicare coverage that will be effective on January 1, 2021. If you’re satisfied with your current coverage, you don’t need to make changes, but it’s a good idea to review your options.

Questions to Consider During Open Enrollment

Open enrollment is your annual opportunity to review your employer-provided benefit options and make elections for the upcoming plan year. You can get the most out of what your employer offers and possibly save some money by taking the time to read through your open enrollment information before making any benefit decisions. Every employer has its own open enrollment period (typically in the fall) and the information is usually available online through your employer.

Incapacity and Advance Medical Directives

At some point in your life, you may lose the ability to make or communicate responsible health-care decisions for yourself. Without directions to the contrary, medical professionals are generally compelled to make every effort to save and sustain your life. Depending on your attitude toward various medical treatments and your views on the quality of life, you may wish to take steps now to control future health-care decisions with one or more advance medical directives.

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