Michael McCormick

5 West Mendenhall, Ste 202 | Bozeman, MT 59715

406.920.1682  mike@mccormickfinancialadvisors.com

Sustainable Income Planning | Investments | Retirement

Winterspring 2021
Market Update
(all values as of 06.28.2024)

Stock Indices:

Dow Jones 39,118
S&P 500 5,460
Nasdaq 17,732

Bond Sector Yields:

2 Yr Treasury 4.71%
10 Yr Treasury 4.36%
10 Yr Municipal 2.86%
High Yield 7.58%

YTD Market Returns:

Dow Jones 3.79%
S&P 500 14.48%
Nasdaq 18.13%
MSCI-EAFE 3.51%
MSCI-Europe 3.72%
MSCI-Pacific 3.05%
MSCI-Emg Mkt 6.11%
 
US Agg Bond -0.71%
US Corp Bond -0.49%
US Gov’t Bond -0.68%

Commodity Prices:

Gold 2,336
Silver 29.43
Oil (WTI) 81.46

Currencies:

Dollar / Euro 1.06
Dollar / Pound 1.26
Yen / Dollar 160.56
Canadian /Dollar 0.73

Dear Friends, 

I am pleased to report the obvious – your investments are most likely doing fantastic!  The pandemic has dramatically accelerated the global wealth gap between the wealthy and poor. The Rockefeller Foundation tracked roughly 2,200 billionaires worldwide that saw their net worth grow by $2 trillion in 2020, while 435 million low income families globally lost jobs, homes and asset values.  For those of us on the upper leg of the ‘K’ recovery, financially, the pandemic has been mostly a pleasant experience.  The increase in value of real estate and stock portfolios is pretty universal, and it’s allowing many people to continue to save as well as pay down debt at the same time.  A great rule of thumb is to be saving 20% of your gross income, because during your high income years is can really add up!

Someday, of course, the market will surprise, confuse, and scare us.  As I’m writing this we are paying close attention to rising interest rates.  So maybe the bond market and our debt load is vying for the next narrative.  Yes, our Nations debt is huge and not beautiful.  But my bet is that the USA still has a lot of credit left with the world economies.

Tax Time is for Planners

Now that we are into tax season, it’s a great time to make sure you are benefitting from all the legal means avaialble to allow you to keep more of your money.  From SEP IRA’s to Charitable Gift Annuities, to Roth IRA’s for your kids, we work with your CPA’s to ensure your savings are tax efficient.  Time is our most valuable asset, so long as we act now.

Did you know that dividend income from stocks can be taxed as much lower rates than income from bonds or annuities?  It’s not what you make, but instead what you keep!

Status: we’ve yet to get the virus (although I know a couple more people that have, and sadly some that have lost their lives).  Be safe, be happy.

Nobody expects the Spanish Inquisition! 

It’s a good thing we are talking about bubbles.  Because few things happen in the stock market that are actually expected.  Google Trends is showing a huge spike in the use of stock market bubble- 5 times the norm for the past decade.

 
37.7 million opting to save rather than to spend their stimulus checks

 

What People Are Doing With Their Stimulus Payments – Consumer Behavior

Surveys done each week by the U.S. Census Bureau are detailing what Americans are doing with their stimulus payments and the results are important. Data gathered from various stimulus recipients among all income levels and educational backgrounds, reveal that a large portion receiving payments are using their funds to pay off debt. The most recent data as of the week ending January 22, 2021, show that nearly 75.5 million people of the 249 million that were surveyed, used the funds to pay off debt.  In addition to paying off debt, recipients also saved their payments, with over 37.7 million opting to save rather than to spend their stimulus checks. Because of these statistics, many believe that millions of Americans receiving stimulus payments may not actually need it.  Furthermore, this money is not stimulating additional economic activity as hoped.

For those that actually need the funds, about 85% of those surveyed are spending it on household expenses, such as groceries, clothing, and appliances. (Source: U.S. Census Bureau)

 

 

 
Nearly 1.8 million workers were absent from work in November 2020

 
SS COLA 2021 increase of 1.3% is less than Medicare Part B increase of 6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic growth for the U.S., as measured by Gross Domestic Product (GDP), rose at a 4% rate in 2020, following a contraction of over 31% in the second quarter alone. The dramatic collapse and ensuing rebound for economic growth was of historical proportion.

Sources: Census Bureau, Rockefeller Foundation, CDC, Federal Reserve, IRS

About Us  Our clients enjoy the feeling of having their financial lives kept in order.  Freedom from worry comes from working with an experienced advisor that understands your entire financial life and is accessible and attentive to your needs.  As a fiduciary, Mike is unable to receive commissions from financial products and free to make recommendations that are unbiased by Wall Street.  With over a decade of experience caring for a small family of clients, our specialties are preserving wealth and generating sustainable income.  Our average client net worth ranges from $3 to $12 Million.  Go outside, we’ve got this.

Market Returns: All data is indicative of total return which includes capital gain/loss and reinvested dividends for noted period. Index data sources; MSCI, DJ-UBSCI, WTI, IDC, S&P. The information provided is believed to be reliable, but its accuracy or completeness is not warranted. This material is not intended as an offer or solicitation for the purchase or sale of any stock, bond, mutual fund, or any other financial instrument. The views and strategies discussed herein may not be appropriate and/or suitable for all investors. This material is meant solely for informational purposes, and is not intended to suffice as any type of accounting, legal, tax, or estate planning advice. Any and all forecasts mentioned are for illustrative purposes only and should not be interpreted as investment recommendations.