Welcome to September – historically the worst month for the stock market since 1950. No one knows the true reason for this September effect, but there is speculation that once vacationers return to work, they may sell positions that they have contemplated selling over the summer. This is also the month that most mutual fund companies’ fiscal years end, leading their managers to harvest tax losses before year end. Whatever the cause, the selling pressure leads to an overall decline in the market. In addition to the September effect, the 2020 market has had the pressure of the COVID-19 shut-down and the activity restart. Thankfully, the unprecedented policy response has helped the market to quickly rebound; however, it will also be important to avoid reversing these policies too quickly.
Our team reviews all these implications and what effect they will have on your portfolios for the long-term as well as the short-term. Our fixed income investments will continue to be quality investment grade credit and various durations of treasury holdings to offset market volatility. For the near-term, we continue to hold defensive positions as well as gold as a hedge against market volatility. When there are good opportunities, we have been strategically putting cash back to work in the market. While we cannot predict what the future holds, we will maintain our disciplined approach and stay committed to diversification.
While voting is always a must, given what’s at stake for everyone this year, casting your vote is more important than ever. The COVID-19 pandemic has complicated the process, but alternatives to in-person voting are available. If the choice is to vote by mail, the slowing of postal delivery adds another complication, so procrastination must be avoided. There are numerous websites with a wealth of information for voters and about voting. https://www.vote.org/ is a comprehensive site, offering state-by-state information on dates, deadlines, and rules, and covering voter registration, voting methods and the corresponding dates, polling locations and how to become a poll worker.
Reminder: In MD, the early voting period runs from Monday, October 26, 2020 to Monday, November 2, 2020, with dates and hours varying according to local directives.
According to the CDC, we are entering the early stages of flu season (because we need another reason to panic!). While CVS and other pharmacies are offering free flu shots now, flu season peaks from December to February and lasts until early Spring. More importantly, the effectiveness of the vaccine generally lasts 6 months and will fade over time. Given that it takes 2 weeks to develop antibodies after your shot, we recommend getting vaccinated in early October. That should get you the optimal protection through early March. And according to CVS, the optimal time to go is on Tuesday and Thursday mornings. Thus, I expect all of us to get scheduled for flu shots on Tuesday, October 6th or Thursday October 8th in the morning. We, at 1 North, want you and your family to stay as healthy as possible. We’ll take care of your finances so you can focus on great health! Stay healthy, my friends!!
For many of you, we started the process of Roth conversions and/or mortgage refinancing. For Roth conversions, we needed the market to take a breather from its rapid rebound. September tends to be a more negative month and we may be getting our needed correction. Be prepared for a call to review the amount for us to convert if this correction continues. No matter what, we will do a full Roth conversion review by November to determine the optimal amount for 2020. Similar timing for mortgage refinancing. The great news is that mortgage interest rates continue to fall, but rates may have hit a bottom. If you have alerted us that you are interested in refinance, you should receive a call from Quicken. If you are still interested in refinancing but haven’t received a call from Quicken, please let me know. Now is the time to get each of these actions completed.
Some people in our local community experienced some devastating damage as a result of the tornado that touched down on Thursday night. If you experienced damage and need assistance navigating your homeowner’s insurance claim, please call us. We recommend checking “Hurricane Coverage, deductible, and exclusions” in your policy. Also, please remember some safety tips that aren’t as commonly known as sheltering in the basement: Lightening can go through your plumbing, so remember not to run water or take any showers/baths during a storm. Stay safe! As always, we are here as a resource for those that you care about and for. If you are worried that your family and/or friends may have been given improper financial guidance or are losing their hard-earned assets, we are available for a free second opinion or guidance to make sure they stay financially safe.
Be well and have a wonderful week!