Hopefully, 2021 has been good to you thus far! As we continue to focus on your financial life, we feel your health (physical and mental), your relationships, and overall wellness is everything. As we promised, in addition to financial and investment planning, we will be introducing topics focused on your lifestyle, health, and exercise. Our mission is to help you Preserve Your Assets and Protect Your Lifestyle and we can think of no better way to fulfill this goal than by offering more than just financial planning and wealth management advice. Our hope is you enjoy our new approach and will discover new ideas for bettering your life in 2021 and beyond!

Monthly Market Review

The S&P 500 ended January with an uneventful loss of 1%. However, it was anything but an uneventful month. With everyone happy to put 2020 in the rearview mirror, the new year didn’t offer much reprieve when the U.S. Capitol was stormed by rioters. Former President Donald Trump was then permanently banned from all social media platforms and impeached by the House of Representatives (for a second time). Trump’s efforts to overturn the presidential election did not stop Joe Biden from being inaugurated as the 46th president of the United States.
 
The last week of the month was capped off by speculative behavior in stocks such as GameStop and AMC Entertainment. Retail investors, many of whom banded together on the Reddit forum called WallStreetBets, piled into individual stocks and call options en masse. And with heavy short interest in these stocks, the heavy buying by retail investors led to a short squeeze and sent stock prices soaring. The meteoric rise of GameStop’s stock made it one of the largest holdings in the iShares Russell 2000 ETF, which gained 4.8% in January. At one point, the video game retailer’s stock was up over 1,700% for the year—giving the company almost a $25 billion market cap (after starting the year closer to $1 billion). The stock has since fallen back to earth—dropping more than 75% from its January high—after many retail brokerages (such as Robinhood) limited the buying of shares and options on many popular “meme stocks.” 
 
Overseas, emerging-market (EM) stocks led the way with a positive return of 3.1% for the month (Vanguard FTSE Emerging Markets ETF). This marks four consecutive months of gains for EM stocks, during which they’ve gained 20.3% compared to an 11.0% return for the S&P 500. Developed international markets fell 0.7% in January (Vanguard FTSE Developed Markets ETF). Foreign stocks have started to outperform after initially trailing U.S. stocks in the first couple of months after the pandemic started. Since the start of June 2020, EM stocks have nearly doubled the return of U.S. stocks (40.6% versus 23.3%, respectively) and have started to reverse the trend of underperforming U.S. stocks that started in early 2018. The relative outperformance of foreign stocks coincides with the falling U.S. dollar throughout the second half of 2020. In January, the U.S. dollar appreciated a bit and was a headwind for foreign returns in dollar terms. Despite that, EM stocks outperformed U.S. stocks.
 
Interest rates inched higher in January. This led to losses in U.S. core bonds of 0.8% (Vanguard Total Bond Market Index) and a loss of 1.1% for the 7-10-year portion of the U.S. Treasury market. The 10-year Treasury yield has steadily increased since last summer and has now more than doubled since early August—going from roughly 0.52% to 1.09% at the end of January. Since the start of August, U.S. core bonds have lost 1.1% and the iShares 7-10 Year Treasury Bond ETF has fallen 3%. Strategies with credit exposure have fared much better during the rise in rates since August—with our non-core bond funds gaining mid-single digits since then. High-yield and floating-rate loans had a positive January with gains of 0.4% and 1.2%, respectively (the ICE U.S. High Yield Cash Pay Index and the S&P/LSTA Leveraged Loan Index).

This Is Life- Thriving in the New Normal 

What are you doing to keep a healthy mind, body, and spirit? As we continue to navigate life in a COVID-19 world, I think most people are excited about the “vaccine.” Granted there are some aspects of our daily routines that have permanently changed. Working remotely and at home has become the “new” normal. Shopping apps like Instacart have changed how we buy our groceries: pick your grocery store, shop its aisles online with your iPhone or Android, and specify when and where you want your “stuff” delivered. Less driving means less gas consumption, a huge win financially. BUT as great as this “new normal” has been, we are all experiencing the challenges and anxiety of social distancing, staying home, seeing our significant others and/or children 24/7. If your kids or grandkids are going to school, ZOOM in a remote classroom is now part of their (and yes our) in-home experience. As much as we miss interacting and socializing pre-COVID, we also crave a little “me” time to relax and simply deal with the new stresses of a COVID world that has the hope of a vaccine, but also the stress of a “new normal” standard of living.
 
We have become more than just financial and wealth advisors to you and your loved ones. We help each other cope with all the challenges of living in a COVID world. Each of us is optimistic about a vaccine, but also realistic that the return to our pre – February 2020 lives may not be possible. It’s been over a year in this “new normal”, and we see the need to offer more to you than your retirement plan probability score. Personally, I have experienced tremendous change in the last 12 months that I never expected in my lifetime. In the many conversations we have experienced with you, friends, family, and other professionals, we have realized how important it is to have “balance” in our lives. It's not whether we can adjust to this “new normal”. But HOW we will adjust to thrive to become better, more productive, more optimistic, and helpful to each other. 
 
In the spirit of helping you adjust and thrive, we are excited to share a new series of town hall meetings we will be hosting to help you in this new COVID-19 world. For the next three months we are planning to cover the following topics in an open and productive ZOOM town hall meeting:
 
March 2021 - Energize For Purpose - Just being present in the moment is not enough. To achieve peak performance you need the energy to be fully engaged in every moment that matters, both professionally and personally. Participate in the Energize for Purpose program and you’ll have a plan for unlocking more and better energy reserves, to stay engaged and achieve peak results - regardless of what’s happening in your life.
 
April 2021 – Managing Stress For Success - We will never remove stress, but we can change how we manage it. With practice, you can learn to use stress as an opportunity for growth. The program will provide you with actionable tools to identify the sources of stress, our reactions to it, and ways to manage it more productively.
 
May 2021 – Brainworks - What’s wealth without brain health? Daily multitasking and our constant state of busyness can create a chronic level of stress on our brain, causing us to be unfocused, distracted, and less productive. But did you know that more is within your control than you may think?
 
Times and habits have changed. Our challenge is making this “new normal” better, more positive, and more fulfilling than the Pre-COVID world that is in our past. The future looks bright and we hope these town hall meetings will contribute to your well-being emotionally, physically, and spiritually.

Your 2020 Tax Filing

Tax season can be stressful and coming off a different year like 2020, you may have more questions and concerns than usual. To help you better prepare for your 2020 tax filing, we found a great article that discusses some ideas to consider.

Click here to view the article.

We are here to help and offer objective advice. If you would like to discuss any of these topics or any questions relating to financial planning and/or the markets, please click here and pick a time on our calendar.