On March 11, Congress passed a third round of COVID-related stimulus via the American Rescue Plan Act (ARPA) with a price tag of $1.9 trillion. This latest package – months in the making – is best known for direct payments of $1,400 to qualifying persons and each of their dependents. A more abrupt income phase-out (adjusted gross income of $75,000 or $150,000 married filing jointly) made fewer people eligible this round. Those who are near that threshold may consider making a deductible IRA contribution for example. But stimulus payment eligibility aside, there are other provisions in the bill that may provide you with some strategic planning opportunities – even for those who do not qualify for direct payments.
Category Archives: Quarterly Newsletters
“Tragedy or Miracle?” – Nvest Nsights Q4 Newsletter
We are thankful for your continued support and for receiving our guidance and advice on investing and “LIVING LIFE” financial planning during the last year – a year which could either be characterized as a “tragedy” or a “miracle”.
Whatever your perspective, 2020 offered BIG surprise (global pandemic, lockdown; or the financial market response to it all?). In this quarterly newsletter we provide brief articles below which aim to provide context about the year we all just experienced and the reaction of the financial markets; what we are focusing on in the year ahead with the dawn of both a new President and congressional political composition; and ponder what unexpected developments might occur.
Our personal finance article this quarter, “Light Bulbs Reveal a Better Idea“, discusses how helpful a big-picture view of your financial position is when the market inevitably encounters unexpected surprises. We observe clients who partner with us in our “LIVING LIFE” financial planning effort so often experience a “light-bulb”, epiphany moment.
A printer-friendly version of our quarterly newsletter can be obtained here: Q4 Nvest Nsights
Light Bulbs Reveal a “Better Idea”
In 1967 Ford unveiled a “see the light” marketing campaign for its new Mustang. That campaign utilized a light bulb which was turned on to illuminate the room with the new Mustang model. This symbolized how seeing something in a new light can result in an epiphany moment – the message: “Ford has a better idea”, a different approach.
“Forward Expectations & UNCH” – Nvest Nsights Q3 Newsletter
Investment growth was furiously positive in the six months following the March lows, besting even the same interval of time following the “Great Financial Crisis” of 2008. In “Forward Expectations“, we review that while history shows the forward return pace typically slows, performance remains positive – particularly when looking +6, +12, or +24 months forward. While September reminded investors that challenges in reopening the economy persist amid covid-19, it is also good to recall that the 4th quarter is often the strongest performance season for stocks. That pattern includes election years. Should historical data not be convincing enough, we explain in “UNCH” how fundamentally significant are the “all-in” efforts of governments around the globe to support their economies. One chart monitoring change in Money Supply “may be all one needs to know” over the next few years. We should assume that uncertainty on many fronts will persist; and uncertainty results in volatility. But “Fear of Volatility” reminds investors not to confuse volatility with risk of loss (they are very different); those who do are more prone to make permanently impactful errors when investing.
Also, if interested: The Higher Wages of Growth, provides a review economic stats recently published by the US Census Bureau.
A printer-friendly version of our quarterly newsletter can be obtained here: Q3 Nvest Nsights
Don’t Surrender to Cash
“Forced Perspective” is a technique employing optical illusions to make objects appear closer/farther, or bigger/smaller than they actually are. Filmmakers would for example place a miniature dinosaur close to the camera so that it would look gigantic in the film. Similarly, many tourists at the Leaning Tower of Pisa take a “selfie” with their smartphone camera, making it appear as though they are preventing the structure from toppling. Reflecting on years of experience it is hard to recall a time where it felt like there was more uncertainty than the present. A global pandemic, social unrest, and a polarizing US presidential contest are presently being placed very close to the “camera” by media, creating HUGE worry – a forced perspective. We cannot recall a time where there were not several big worries simultaneously distracting investors. The chart below provides just some past examples.
The Higher Wages of Growth – Review of Recent Economic Stats
In case you missed it as most of the media did, the Wall Street Journal (September 17, 2020) published an article by this title. In essence – “Rising economic growth lifted all classes.” The US Census Bureau reported some interesting personal income statistics:
“65 Days… Now What?” – Nvest Nsights Q2 Newsletter
As we move into the 2nd half of 2020, we are struck by how much is changed from just 6 months ago. A global health crisis/pandemic thrust the world into what is arguably the deepest and sharpest economic recession in a generation’s memory. If that were not enough, the backdrop of acute economic pain combined with several most unfortunate societal tragedies to create a degree of social unrest not felt so acutely in many years.
Despite these dynamics, the 2nd quarter provided strong recovery for global financial markets. Most attribute this almost unbelievable market rebound to a forceful fiscal and economic policy response by governments globally. In this quarter’s newsletter (below), you’ll find 3 brief articles. The first, entitled “65 Days… Now What?”, places the strength of the stock market since the March 23 low in historical context and reviews the actions we pursued early in the 2Q to position portfolios for economic recovery; “Offense Still on the Field” explains how the process of reopening the economy will remain complex amid lingering fallout from the reality of covid-19. Lastly, “True vs. True? And Truth!” examines the Great Depression era (1930’s) and the series of what are now considered consecutive policy mistakes that likely kept both the economy and financial markets impaired longer than if different actions were pursued. Studying these is relevant to the path forward.
A Focused Financial Life: New Tool to Aid Financial Fitness
1) Set financial goals; 2) Understand where your money is going; 3) Manage your debt; 4) Put your finances on autopilot; 5) Maintain a steady lifestyle; 6) Invest wisely; 7) Obtain knowledge and advice.
At Nvest, our primary goal we strive to achieve with each client is “delivering financial peace of mind.” We believe this goal is best achieved through regular communication; a prudent, time-tested approach to investment management; and via a strong and detailed understanding of how your accumulated assets form the big picture, “financing” you through each stage of your life. In these respects, we are excited to introduce and make available to clients a new tool we call the LIVING LIFE client portal.
“The Price is Right?” & “Framework for a Path Forward” – Nvest Nsights Q1 Newsletter
Nvest (Bill, Steve and Jordan) wishes for you and your family/friends good health, safety and wellness from this COVID-19 virus and the economic challenges. We are greatly concerned by the very real human health impact and ongoing crisis; praying for a timely cure for these current health and economic challenges. Let us know of your worries and if we can be helpful. While it would be unwise to meet in person due to social-distancing protocol, we can visit virtually via web meeting to review your needs, portfolio reactions, and discuss LIVING LIFE financial planning questions. Call or email to coordinate a time to visit.
This quarter you will find several timely updates. First, “The Price is Right?” reviews how swift was the transition from bull market into bear and shares historical perspective; places the size of recent government responses in context; and what we are watching to signal that durable recovery may be near or developing. “Framework for a Path Forward” examines whether the market low observed on March 23 was “a” low, or “THE” low. It is important awareness that retests are normal during periods of market stress, but the market will offer clues beneath the surface about where we are and when/what actions are appropriate to position portfolios for recovery. “Thoughtful Comments for Careful Consideration” is a compilation of notable quotes from highly respected individuals that can be helpful during challenging environments.
When Life Throws You Lemons, Make Lemonade – Strategies During a Bear Market
No sugar-coating it; the start of this New Year is not what any of us hoped for. Day to day life is highly uncertain, and investments are bruised. While the cause of the current environment is unique and uncharted for every living generation, this too shall pass. Periods like this can cause one to feel paralyzed, with nothing to do but wait it out. However, there are strategies individuals can pursue that will position them to benefit when the storm begins to clear, and simultaneously help you restore a long-term mindset.