U.S. Performance Dashboard – March 2020

By | April 2nd, 2020|Markets|

  • Global markets in Q1 were devastated by the coronavirus pandemic. U.S. equities posted their worst quarter since 2008, with the S&P 500® down 20%; smaller-caps performed even worse, with the S&P MidCap 400® and the S&P SmallCap 600® down 30% and 33%, respectively. Volatility rose, with the VIX® closing at a record high of 82.69 on March 16th.
  • International markets were not spared, with the S&P Developed Ex-U.S. BMI and S&P Emerging BMI down 24% and 25%, respectively.
  • While all factors and sectors posted losses, Momentum, Growth, Quality and Low Volatility managed to outperform the market.  Info Tech and Health Care were the top performing sectors, while Energy was the laggard, down an astonishing 50% as a result of the plunge in oil prices.


Epidemics and Stock Market Performance

By | March 30th, 2020|Markets|

Clients and Friends:

Our firm is busy monitoring the current market conditions, events and client accounts.  Here is a brief overview of recent events:

Last week was one for the history books. Tuesday: the highest percentage gain for the Dow since 1933.  Thursday: record new unemployment benefit claims of 3.3 million—doubling some estimates. In the end, the Dow finished the week in the green.

Dow Jones Industrial Average*
  Monday Tuesday Wednesday Thursday Friday The Week
-582 +2,113 +496 +1,352 -915 +2,463
-3.0% +11.4% +2.4% +6.4% -4.0% +12.8%
Notes on recent events:

  • The Federal Reserve raised its response to the coronavirus crisis to a whole new level, with its open-ended QE as well as unprecedented purchases of short-dated IG corporate debt and ETFs, measures that had not been adopted even at the height of the global financial crisis.
  • The decision to purchase ETFs expands the purchase of IG debt to longer maturities. Together, these measures show that the Fed understands the need for a creative, decisive and adaptive strategy to fight the current crisis.
  • The Fed announced a raft of new measures and facilities aimed at: 1) providing targeted relief to affected households and businesses; 2) giving broad support to economic activity; and 3) ensuring the smooth functioning of money and credit markets. These include:
    • Open-ended QE. It announced it will purchase Treasuries and agency MBS “in the amounts needed” to keep markets functioning smoothly and ensuring monetary policy can do its job.
    • New facilities to support credit to households and businesses with up to $300 billion in new financing.
    • Expansion of [liquidity facilities] to a wider range of securities.
    • Planned launch of a program to support lending to small- and medium-sized businesses.
  • We think the Fed’s support can help the US economy survive the shock and set the stage for a strong recovery in the second half of the year, on two conditions:
    • One: the government-mandated shutdown of large parts of the economy is sufficiently short-lived. 
    • Two: Congress follows suit and launches a sizable package of fiscal measures, and remains committed to implementing all measures that may be needed to weather this exogenous shock.
  • Update as of 3/27 – Congress negotiated a $2 trillion relief bill this week, the largest stimulus package in US history, that has now passed the House and Senate—and was signed by the President into law.

Market updates:

  • In terms of where the markets go from here, our base case is U-shaped recovery; likely with some significant ups and downs during this phase. A quick V-shaped recovery seems unlikely barring an antiviral breakthrough.
  • The delay in rebound is because the demand shock should lead to business and household stress that, in turn, leads to higher unemployment and defaults. This puts “stickier” downward pressure on aggregate demand in the recovery phase. On the positive side, our base case is that we experience the worst of the virus before the second quarter of 2020 is over.
  • As we’ve often discussed, we recognize that while we can’t control returns, we certainly can control risks. Even in these uncertain times, we seek to build well-diversified, low-cost portfolios.
We will continue to monitor the situation and make any recommendations that we deem appropriate, but given that your goals and time horizons haven’t changed, we believe the current strategy remains the best course of action.




By | March 14th, 2020|Markets|


Manic Monday (Tuesday, Wednesday, Thursday, Friday)

By | March 10th, 2020|Markets|

I’d like to share today’s insights from Schwab Chief Investment Strategist Liz Ann Sonders in response to the economic implications of COVID-19 and the recent crash in oil prices: Manic Monday (Tuesday, Wednesday, Thursday, Friday).

I hope these insights help you navigate the current market volatility. Please reach out with questions or for more information.


January Performance Dashboard

By | February 6th, 2020|Markets|

  • U.S. equities started the year strongly, but gains were erased towards the end of the month as a result of coronavirus fears. The S&P 500® was flat in January, while smaller-caps lagged, with the S&P MidCap 400® and the S&P SmallCap 600® down 3% and 4%, respectively.
  • International markets declined, with the S&P Developed Ex-U.S BMI and S&P Emerging BMI down 2% and 4%, respectively.
  • Low Volatility was the top performing factor; not unrelatedly, Utilities was the top performing sector with Real Estate close behind. Similarly, Momentum and Growth were the next best factor index performers, while Info Tech and Communication Services were the second and fourth best performing sectors. Meanwhile, in a reversal from last year’s outperformance, Value lagged Growth.

Year-End Performance Dashboard

By | January 2nd, 2020|Markets|

  • In sharp contrast to last year, U.S. equities triumphed in 2019, with the S&P 500® up 31%, its biggest annual gain since 2013.  Easing trade tensions and Fed accommodation renewed optimism about the economic outlook. Mega-caps dominated as gains for the S&P MidCap 400® and the S&P SmallCap 600®, 26% and 23% respectively, lagged the S&P 500.
  • International markets also gained, with the S&P Developed Ex-U.S BMI up 23% and the S&P Emerging BMI up 20%.
  • High Beta was the best performing factor, followed by Quality; not unrelatedly, Information Technology was the best performing sector, up a remarkable 50%.  Meanwhile, Value outperformed Growth for the first time in three years.

November Performance Dashboard

By | December 2nd, 2019|Markets|

  • Amid optimism that U.S.-China trade issues will be resolved amicably, U.S. equities showed strength in November. The S&P 500® was up 4%, its biggest monthly gain since June, while the S&P SmallCap 600® and the S&P MidCap 400® gained 3%.
  • International markets also gained, with the S&P Developed Ex-U.S BMI up 1%.
  • The resurgence in Value continued, as Enhanced Value was the best performing factor. Year-to-date, Quality was the top performing factor index, up an impressive 29%; not unrelatedly, Information Technology was the best performing sector.
  • dashboard-us-2019-11

Video series: Retirement Readiness #3 – How should I Invest?

By | November 26th, 2019|DFA, Dimensional Fund Advisors, Markets, retirement|

How much retirement income can YOUR portfolio support? Have you considered interest rate and inflation risk? Focusing on a final number doesn’t tell the whole story. It’s important to have discussions with a financial planner about income streams and cost of living in your retirement years.

Top 8 Reasons to Choose a Solo 401k – SIGN UP BELOW BY 12/31/19!

By | November 21st, 2019|Markets|


I want to set up a Solo 401k and Save!

Please contact me to set up a consultation, and help me set up my Solo 401k before the December 31st deadline!

Solo 401ks are cost-effective, powerful retirement vehicles. They are designed for self-employed workers who have no employees other than a spouse. They allow small-business owners to stash away much more for retirement than they could stash in a traditional IRA or a SEP IRA, while avoiding the expense and paperwork of setting up a full traditional 401(k) plan.

1) Generous Contribution Limits

For the plan year 2019, a participant under the age of 50 can make a maximum employee deferral in the amount of $19,000. This is also called an “employee” contribution. Age 50+ can contribute up to $25,000.

2) Ability to Self-Direct

With a Solo 401k, you can act as your own trustee. This eliminates the need for a bank or trust company to serve as a trustee. The plan participant (you) is in control of the plan.

We have established many Solo 401k’s for individuals in our firm. Charles Schwab’s user friendly platform makes it easy to save aggressively.

3) Profit Sharing Provision

On top of the allowed employee deferral, the participant can also contribute up to 25 percent of total compensation to a profit-sharing component of the plan. This is often called an “employer” contribution.

Total combined plan contributions (employer and employee) cannot exceed the lower of $57,000 or 100 percent of compensation (plus any catch-up contributions if over the age of 50).

4) Contributions are Elective

Contributions to a solo 401k plan are entirely discretionary. A participant has the option of contributing to the plan and can reduce or even suspend plan contributions as necessary.

5) Ability to Take Out a Loan

A solo 401k allows participants to borrow up to $50,000 or 50% of their vested account value (whichever is lower). This loan can be made for any purpose with a payback period of up to 5 years.

This offers significant flexibility and provides flexibility against having to take a withdrawal that would be subject to a tax penalty. This flexibility is in contrast to an IRA that offers no participant loan feature.

6) Minimal Tax Filing Requirements

There are no annual filing requirements unless the solo 401k plan exceeds $250,000 in assets. The Solo 401k is extremely easy to administer.

7) Roth Contributions

Solo 401ks can include a Roth component. Just like Roth IRA contributions, Roth 401k contributions are made on an after-tax basis. Unlike a pre-tax contribution, there is no upfront tax deduction. However, a distribution of Roth 401k contributions (along with earnings) is tax-free.

Individual taxpayers are disallowed from contributing to a Roth IRA based on income restrictions. These same restrictions do not apply to Roth 401k contributions. A Roth 401k contribution has the same limitation as an employee deferral of $19,000. This is substantially more than the limit of a Roth IRA.

8) Rollover Provision

One key advantage is rollover flexibility. A solo 401k can accept rollovers from other retirement accounts, such as an IRA, a SEP, or a 401k from a prior employer. However, Roth IRAs cannot be rolled into a solo 401k.


Video series: Retirement Readiness #1 – Monitoring Your Progress

By | November 14th, 2019|Dimensional Fund Advisors, Markets, retirement|

When planning for retirement, it’s important to keep in mind how much spending your savings can support. The decisions you make today can help improve your retirement readiness.

Beyond determining how much money to save, it’s useful to think about retirement in terms of how much income you’ll need after you stop working. Dimensional’s My Retirement Income Calculator can help give you a sense of how much income your savings could provide in retirement.

Enjoy our Retirement Readiness series to help you set and achieve your retirement goals.

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