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Wealth

2021 First Quarter Market Commentary by Ashley Vice, CFA, CFP®

As we enter the second quarter of the year, U.S. stock markets are at all-time highs, interest rates are historically low, and the economy is growing faster than it has in decades. We're now vaccinating over 3 million people per day, with over 165 million doses administered so far. Life is returning to normal and economic activity is akin to a post-war reconstruction period. The implications of COVID vaccines for the economy and markets are enormous. So is the scale of fiscal and monetary stimulus. In the U.S. alone, combined monetary and fiscal policy as a percent of GDP (the total...

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Market Commentary from Ashley Vice, CFA, CFP

Last year, Barron’s magazine asked ten top strategists to predict where the S&P 500 would end 2020. Their range was 3,000 to 3,700. The final number was 3,756 for a year-over-year return of 16.3%—much better than expected. Had the strategists possessed foreknowledge that a global pandemic would shut down the services economy and send unemployment numbers to the highest level since the Great Depression, I doubt we would’ve seen a single year-end target with a 3-handle. But as of this writing, most markets are at or near all-time highs. That’s because the worst pandemic in the last hundred years was met...

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Charitable Giving as part of your Tax Planning Strategy

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning. Tax deduction for charitable gifts If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help you potentially increase your gift. Assume you want to make a...

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Market Commentary from Ashley Vice, CFA, CFP

2020 is making it harder to talk about “markets” as if they are a common entity and not thousands of individual companies facing dramatically different challenges and opportunities. I could say that “the market” is up through the third quarter, but that would be a poor description of the year so far. What has really happened is that a handful of very large tech-oriented US stocks have had a great year while the other 99% of publicly-traded companies around the world have had a year ranging from unexceptional to awful. The dispersion of returns between the best and worst sectors, sizes...

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In Recovery? Market Commentary from Ashley Vice, CFA, CFP

9 minute read Here’s what 2020 has thrown at us so far: a global pandemic, economic depression, tens of millions unemployed, zero-percent interest rates, unprecedented monetary and fiscal stimulus, an explosion in the debt and deficit, and social unrest in the form of riots and protests. And there’s a presidential election in four months. Meanwhile the S&P 500 is essentially flat for the year. The question I get most often is “how can the markets be this strong with all that’s going on? It seems disconnected from reality.” I understand the sentiment but there’s good reason for the resilience. Widely-followed indices like the S&P...

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Coping with Market Volatility: Understand How Your Biases Can Affect Investment Decisions

When it comes to your finances, "go with your gut" might not be the wisest adage to follow. In fact, it may work against you, particularly in periods of market turbulence. Before jumping to conclusions about your finances, consider what biases may be at work beneath your conscious radar. Recency bias refers to the tendency for recent events to have a stronger influence on your decisions than more distant events. For example, when the market was in the midst of an 11-year bull run, you may have increased your investments in equities, hoping to take advantage of any further gains. By...

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Market Update from Ashley Vice, CFA, CFP(r)

Last quarter was unprecedented in many ways. Global economic activity basically stopped as the world sought to slow COVID-19 infections and protect the health care system by ‘flattening the curve’. The efforts seem to be working, with strong evidence that the worst of the contagion has passed. Virus-induced deaths will likely turn out to be orders of magnitude less than initially predicted. We’re all thankful for that. I won’t spend much time discussing the virus since the updates come so rapidly. Nor will I expound on the fiscal responses, other than to say that they have been large and necessary, and...

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Coronavirus Update – Part III

In investing, there are years when nothing happens and there are years when decades happen. 2020 will be one of the latter. At today’s close, the S&P 500 is down 29% from the February 19 highs. This is the sixteenth “bear market” in the modern era—defined as a decline of 20% or more from a previous market high, on a closing basis. What makes this instance particularly challenging is the unprecedented speed; it took just 16 days to go from an all-time high to a decline greater than 20%, the fastest bear market in history. To effectively deal with bear markets, it’s...

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Please be advised: SIMA Response to COVID-19

In response to COVID-19 we will be transitioning our team to a remote working policy for the foreseeable future. At this time a limited staff will remain at our office to provide essential operations. Our service to you as well as the health and safety of our team is our primary concern throughout this time. Our team has the technology and resources required to effectively work remotely and will continue to provide you the service you need. Our Accounting team plans to remain at the office until further guidance is provided by the Internal Revenue Service (IRS) on the possible extension...

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Coronavirus Update – Part II

Yesterday the Dow fell 1,190 points—the largest point decline in history. It sounds apocalyptic, but it was only the 125th worst percentage decline. It matters how we measure these things. Yet all we hear are stories about points. Take from that what you will. In all, the S&P 500 lost 11.45% this week, a swift decline from last week’s all-time highs. No matter how often we have corrections or bear markets, or how periodic or “normal” they are, we’ll never get used to them because we abhor losses. Even temporary ones drive us crazy. Blame the limbic system and the amygdala...

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