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THE WEEK ON WALL STREET: Last week, the the Standard & Poor’s 500 rose 1.27%. The MSCI ACWI Index, a broad measure of equity-market performance throughout the world, also rose 1.19%. Additionally, the Barclays Global Bond Index also rose 0.25%.

QUARTERLY MARKET COMMENTARY: In case you missed last week’s quarterly commentary from our Investment Committee, which includes a closer look at the virus, the economy and investment changes we have implemented, click here to access.

REVISITING RMD SUSPENSIONS WITHIN THE CARES ACT: Due to this massive piece of legislation not being ratified until the end of March, many individuals already took what they thought were their 2020 required minimum distributions (RMDs).  Many of those retirement account owners (perhaps this includes you) and beneficiaries wanted to “undo” those distributions that were no longer required and put them back into their retirement account.

Cue IRS Notice 2020-51, which was recently released. This ruling clarified that you may indeed choose to roll your RMD back into your IRA, which would lower your taxable income for 2020

*If you took a distribution but would like to roll it back into your IRA, please let us know ahead of the August 31 deadline and we can make that as painless as possible.

FIRST CORONAVIRUS VACCINE TESTED IN HUMANS SHOWS EARLY PROMISE: An experimental coronavirus vaccine made by the biotech company Moderna provoked a promising immune response against the virus and appeared safe in the first 45 people who received it, researchers reported on Tuesday in The New England Journal of Medicine.

Moderna’s vaccine, developed with researchers at the National Institute of Allergy and Infectious Diseases, was the first coronavirus vaccine to be tested in humans, and the company announced on Tuesday that large Phase 3 tests of it would begin on July 27, involving 30,000 people. Half of the participants will be a control group who will receive placebos.

CONTINUED CHASM BETWEEN ECONOMIC/VIRUS NEWS AND THE STOCK MARKET: As dire as some of the news can be about the enormous effects the virus has had on both the human and economic level, the real hope remains in the creation of a safe and effective vaccine to stem the tide. “As the race for a COVID-19 vaccine makes progress, this has allowed investors to look beyond the surge in cases in the hope that economic recovery will continue to endure,” said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview with MarketWatch.

This is another reminder that the stock market is not the absolute measurement of the economy. The market recovery since March has not been broad-based. The large indices have become dominated by mega-cap tech companies that have soared, while value has lagged, as shown in the chart below from July 2. Can this trend continue?

PLANNING CORNER: CHANGES TO 529 PLANS ALLOW MORE OPPORTUNITY: At the end of 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act has many retirement-related implications, but it also includes expanded benefits for 529 plans.

These 529 plans are tax-advantaged accounts that allow investors to save for education expenses. They can be used as early as kindergarten and go through undergraduate and post-graduate higher education. Families contribute after-tax dollars, which can grow on a tax-deferred basis and be withdrawn tax-free when used to pay for qualified education expenses.

This helpful chart from Columbia Threadneedle shows the benefits and new changes that have been implemented to help meet the daunting task of saving for education and now includes opportunities to address student loan debt and now includes assistance with apprenticeship programs. We help many clients and families with the planning and implementation of 529 plan accounts. If you have any questions or interest in learning more please let us know.

WHAT WE’RE LEARNING: Crises are disorienting, there is no doubt about that. The COVID pandemic has created a ripple of crises throughout our culture, and as is natural, our instinct is to look to the leaders wherever we can find them. “What exactly is happening?” “What should I do?” We look for cues for how to act, how to feel and how we might move ahead together. The Harvard Business Review published an article on some patterns of leadership during the pandemic. As they listed the traits, we were encouraged to see that within the little corner of the world we were taking turns leading one another, demonstrating the very traits listed in the article for one another:

  • Act with urgency and follow through
  • Communicate with transparency/candor
  • Respond productively/humbly to missteps
  • Engage in regular communication, stay in sync with one another