I hope everyone is staying both healthy and safe. Earlier this week, I was on a call with some other local business owners. At the start of the call, each person shared something they had to be thankful for during the pandemic. Being a father is important to me. I also want to provide for my family. Sometimes these two desires cause internal conflict. Being home with my family all the time makes spending quality time together even more important. The pandemic has served as a much-needed reminder of this. Last weekend, we had a wonderful Mother’s Day celebration. I hope all the other moms out there did, too.
Because of the CARES Act, retirees and beneficiaries of Inherited IRAs are not required to take RMDs this year. If you plan to skip this year’s retirement account withdrawals, you'll find some helpful guidance in this week’s first article.
If you have any friends that are nervous and do not have an advisor or whose advisor is not reaching out to them, feel free to have them give me a call. I’m happy to spend 15 or 20 minutes answering their questions, no-obligation because they are a friend of yours.
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Click here for a video overview of this week’s content.
Here are the links to this week’s articles as well as a brief description of each:
1. How to Skip Your Required Minimum Distribution in 2020. Under current law, retirees must take annual withdrawals from their retirement accounts beginning with the year they reach age 72. However, the Coronavirus Aid, Relief, and Economic Security Act allows you to skip your 2020 required minimum distributions. This applies to both regular retirement accounts and Inherited IRAs. This article outlines some things you need to know about delaying your retirement account withdrawals until 2021. If you have any questions, please send an email to firstname.lastname@example.org.
2. What If You Don’t Want to Go Back to the Office? Do you enjoy working from home? Do you want to continue to do so after the pandemic ends? Working from home can save the time and money associated with commuting. For some, it increases productivity and improves job satisfaction.
3. The Stock Market Is Not the Economy. On Wednesday, the S&P 500 Index closed about in line with year-ago levels. Because of the pandemic, the economy is much weaker today than it was a year ago. On the surface, this disconnect doesn’t make much sense. But the economy's performance may or may not be indicative of the market's performance. Stock prices are only loosely connected to the economy. The stock market is viewed as forward-looking – it anticipates future developments. Employment statistics and GDP growth also don’t directly impact equity prices. Future expectations play a much bigger role. In particular, consider the following factors:
· Future earnings
· Future interest rates
4. Here's What Happens If You Work From Home Without a Routine. When we work from home, no one imposes a routine on us. The beginning and end of our day are undefined. You must decide these things on your own. Establishing a routine can help. If you don’t have a routine, one of two things will probably happen:
· You’ll work constantly and ignore your loved ones; or
· You won’t even start your workday.
5. Uncertainty. In his latest memo, Howard Marks of Oaktree Capital Management discusses uncertainty. When investing, uncertainty is a given. That makes how we deal with it important. In this memo, Mr. Marks discusses the value of understanding, the limitations of our foresight, and “investing scared.” We should know the world is an uncertain place. It should also be clear that “it’s more uncertain today than at any other time in our lifetimes.” This makes the ability to deal intelligently with uncertainty one of the most important skills.
If you need a pep talk or to discuss your investment strategy, please schedule a call or reply to this email. I'm here for you and happy to talk.
P.S. There has been an increase in coronavirus-related phishing and identity theft scams. Please be on alert for “official-looking” emails asking you to open an attachment or click a link to read an official statement – they may contain malware. If you get a suspicious email, check the sender’s name and email address to make sure they’re not fake. When in doubt, delete the email. Do you have someone in your life who you think might be at greater risk of email scams? Forward this to them so they're aware.
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