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2020 Q2 Newsletter

Second Quarter 2020 – The second quarter of 2020 was a bounce back quarter after the severe decrease of the first quarter. The chart below tells the tale. Large US companies have done well over all three periods lead by big name tech: Amazon, Google, Microsoft, Facebook, Apple, and Netflix. Those gains were from increased revenue resulting from the virus. Small companies and international rebounded, but are slightly below break-even for the three-year period. Real estate struggled with tenancy and rent payments. Bonds did well during this period. Our overall allocation for most of you is toward the 60/40 shown below which showed a good quarterly recovery and modest but positive returns for the one- and three-year periods.

What’s ahead for the market – The investment returns ahead are dependent on the Coronavirus treatment and anticipated vaccine. The virus affects employment, productivity, and corresponding government transfer payments, consumer spending, savings, revenues and profits. The recovery has been uneven with tech leading the upside and airlines, cruise ships, energy, restaurants and travel feeling the downside brunt. The general sense in the market is pricing securities for 2021 and future years and trusting a vaccine will be available. Your long-term perspective and patience were never more important for you as investors. We will continue with well-diversified portfolios and rebalance periodically.

The upcoming elections – The virus has affected predictions for the upcoming elections in November. In February the prediction was for a continuation nationally. Now some surveys and predictions are showing a Democratic sweep in November. A Democratic sweep would undoubtedly affect the market and the tax law.

Markets functioning – We are fortunate that the markets have functioned well during this pandemic. We have been able to access and trade in all of your accounts at TD Ameritrade and the securities had good liquidity. We use primarily widely held securities for your accounts so we can convert any investment in your account into cash within a three-day period. The markets created an alternative to market centers resulting from the 9/11 attack. As a result, the markets functioned normally and our TD Ameritrade institutional support team was stellar.

In Karen’s Corner:

RMD waived for 2020 – as a result of the financial impact of Covid-19 on consumers, the Treasury has waived the requirement for IRA accountholders to take a minimum distribution for this calendar year. You may still choose to take the distribution. If you haven’t already taken your distribution for the year and wish to change your approach since the enactment of the CARES Act, please get in touch with me.

Plant Your Flag – You may be aware of services available to you online to get tax transcripts, see your Social Security benefits or even review your USPS mail being delivered. If you aren’t utilizing these online resources, it is still a good idea to establish a user account on these sites. Doing so can prevent cyber-criminals from creating fraudulent identities on the sites in your name. The ways a criminal can utilize the tools are too numerous to list here, I have added a collection of starting points to our website: https://www.handycompany.com/resources


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2020 Q1 Newsletter

FIRST QUARTER 2020 – The coronavirus seriously affected the returns for the first quarter of 2020. Equities were down 19% to 32%, with large cap companies faring the best. Real estate was down 23%. Bo