December 2019
We wish you the very best during the holidays as you celebrate and enjoy time with your family and friends and reflect on the fruits of your labor. We are grateful for your relationship and partnership with us, and are thankful for your support, your trust, and your collaboration. As we enjoy and reflect this Holiday Season, it’s a great time for us to review, assess and plan for your future. This month’s newsletter gives you a brief update on the investment markets, a continuation of our “This is Life” series and some valuable information on Required Minimum Distributions for retirement accounts.
Monthly Market Update
Global stocks continued their upward trend in November. The MSCI ACWI Index, a common measure of both developed and emerging-market stocks, gained 2.4% in the month. This index broke through highs not seen since early 2018. U.S. stocks continue to lead returns across the world, gaining 3.6% in November. Amazingly, the S&P 500 Index closed at a record high 11 times during its 20 trading days in November. Foreign equity markets were positive in November but unable to match the returns of U.S. stocks. European stocks gained 1.3%, while emerging-market stocks returned a modest 0.5%.
Currently, every underlying sector of the S&P 500 has a positive year-to-date return (2013 was the last calendar year where all sectors were also positive). The majority of sectors are clustered around the S&P 500’s gain of 27.6%; however, technology and energy are outliers on either end. If the tech sector return holds, it would be the sector’s best calendar year return this decade—a fitting end to a decade that has been dominated by technology and tech-related businesses. Whether many of these businesses thrive in the 2020s remains to be seen, but it will be hard for their share prices to match the sector’s 17% annualized return this decade.
As is typically the case with investing, there is always something to worry about—and that “something” continues to be a trade war between the United States and China. A “phase one” trade deal was supposed to be agreed upon in November, but negotiations continue to drag on and uncertainties linger. The two sides have about two weeks to agree on terms before the United States is set to impose another round of tariffs on Chinese goods on December 15.
In the fixed-income markets, the U.S. Treasury yield curve steepened last month following a Federal Reserve rate cut late in October, which brought the short-end of the curve lower, while the longer-end inched up during the month. Most bond markets were flat to negative in November. The U.S. core bond index lost 0.1% but is still up an impressive 8.8% year to date. High-yield bonds and floating-rate loans were both positive, gaining 0.3% and 0.6%, respectively. At this point, bond markets don’t expect the Fed to cut for a fourth time when their December meeting concludes.
It has been an exciting year in the investment world, but the past is the past. Our role as your fiduciary and advocate is to be prepared for whatever challenges and opportunities the investment markets present to us as we enter 2020. Our DRAAMS asset management platform allows us to be nimble and responsive to the everchanging environment we will face together. Regardless of the size of your account and/or the asset allocation, we have recommended to support your financial goals, DRAAMS gives us the ability to make portfolio adjustments for you in timely and efficient manner. To learn about our DRAAMS asset management process, click on this link.
This is Life
The “Season of Giving & Receiving” is upon us! Text messages from companies you thought did not have access to your phone keep popping up. Every day your email inbox is inundated with marketing messages. Offers of discounts and guaranteed delivery before December 25th of anything you “point”, “click”, and “buy”. Apple Pay, Google Pay and Amazon are streamlining the buying experience for you. You can shop, spend and be happy without having to physically use a credit card……. and then……. your January 2020 bill arrives in the mail……. OR if you are paperless ……you experience the joy of seeing the balance when you log into your account in the New Year!
Is there a better way to manage this “Happy Holidays Surprise” or at least plan for it? The short answer is Yes! What you choose to spend is a personal decision. As your objective and unbiased financial advisors, we recognize holiday spending, birthdays, a new car, a vacation, college tuition, a supplemental health plan, and/or a mortgage payment are simply examples of spending goals built into your life. GFP has developed a checklist to help identify financial planning topics of interest for you as we begin 2020. Click here and take a couple of minutes to complete your checklist, and send it to info@guardianfinancialpartners.com. We will contact you and schedule a time for us to discuss your completed checklist OR you can click here and select a time that works best for you.
Required Minimum Distributions (RMDs) for 2019
As part of our service to you, we review and help determine whether you are making the necessary RMDs from your GFP retirement accounts for 2019. For our clients who are over 70 ½ with retirement accounts or an Inherited IRA/Roth IRA, we typically process the RMDs in the month of December.
Here are a few basic rules that apply to RMDs.
For IRA s –
For Inherited IRAs or Inherited Roth IRAs –
If you hold retirement assets at another firm other than GFP, we would recommend confirming the RMDs from those accounts have also been calculated and distributed before the end of this year. Ideally, with enough time to liquidate and transfer assets to meet the RMD requirement for 2019.
As always, we value our relationship with you, and continue to offer unbiased advice towards Preserving Your Assets and Protecting Your Lifestyle.
If you would like to schedule a time to discuss your needs, please click below and pick a time on our calendar, click here.
