MONTH-2-MONTH
FEBRUARY 2021
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MONTH-2-MONTH is intended to provide you with updates on AFP and timely financial planning and investment information on a variety of topics. 

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FEBRUARY VIBES
The Buckeye State has experienced record snowfall this February. The deep, winter freeze affects us all differently.

Some peer out the window and see a magnitude of fun possibilities to experience. The options can be adjusted to fit your lifestyle and abilities. Consider trying winter sports, make snow angels, or take a hike and enjoy the quiet beauty of winter in the woods. Very soon the Maple sap will be flowing from the trees and we can't think of anything sweeter than warming our gloved hands with a hot cider after a taste of fresh maple syrup.

For those who may be feeling less optimistic about the view outside your window, there are ways you can project a positive mindset. Stay in the moment and be self aware of how you are feeling. Use meditation techniques and visualization to bring about feelings of optimism. When you encounter others, be an active listener, respond kindly, compliment sincerely, and share your gratitude. Positivity can be contagious and we encourage you to spread this to everyone you encounter.

• HAPPENING AT AFP •
  • Love is in the Air, actually the Water - We are excited to share that our fish tank is again, an incubator. We have baby fish! They are very small and hard to spot, seeking safe harbor among the plants near the bottom of our tank. Teri has been adding special food that sinks in hopes that the babies will take a nibble.

  • Webinars from AFP      We are moving forward with this so stay tuned. Please continue to let us know what topics interest you or help us to name this new venture. Suggestions are welcome.

  • The new normal equals status quo at the office and we continue to social distance from each other within our individual offices. If a change to working conditions becomes necessary, we will let you know.

  • We continue to host Virtual Meetings using Zoom for your safety. Due to the size of our office conference room, proper social distancing is a challenge. We hope to return to face to face meetings in the spring, if safe.

  • For those that must visit our office, please check in with us prior to visiting. Once you are in the parking lot, please give us call so we know you are here. There may be periodic road closures due to construction projects currently underway in the immediate vicinity of the office.
FYI

  • 2021 Required Minimum Distributions (RMDs) - RMD forms and letters have been sent out. If you are required to take a RMD in 2021, please expect this in your mailbox soon. You have until the end of the year to complete your RMD.

  • 2020 Realized Gain Loss Reports - Realized Gain Loss Reports for 2020 were mailed out recently. These reports are generated for taxable accounts only including Wealth Management clients or Investment only clients eligible for Orion. For other taxable account holders, information reporting gains and losses for 2020 is included within your TD Ameritrade Consolidate 1099 form. Consolidated 1099 forms were required to be postmarked by 2/16/2021and should be mailed from TD Ameritrade directly to you. Let us know if you haven't received yours.

  • Schwab's acquisition of TD Ameritrade continues to crawl forward. As of March 1, 2021, TD Ameritrade will be implementing changes to the bank sweep program. The bank sweep program refers to how cash balances in your account are managed. Most cash is held in a FDIC insured deposit account (IDA). There are several IDA options (known as 'Program Banks') used at the discretion of TD Ameritrade. The 'Program Banks' will be changing from TD Ameritrade to Charles Schwab. This may result in a change of title or symbol as indicated on your monthly account statement. Please be aware that cash balances in some accounts are using sweep options different from IDA. Usage of this strategy is at Teri's discretion.


  • Proxy Voting Policy- You have a right to vote in some company actions as a shareholder in a company or mutual fund. Proxy voting ballots are often sent in advance of shareholder meetings. Companies need a certain number of shareholders to vote in order to pass the actions, and will persist until enough votes are received. We encourage you to vote. As a policy, AFP does not vote proxies on our client's behalf. Click here to learn more about shareholder voting. 


  • Orion Portal Update - Orion will be launching a new version of the Client Portal early in 2021. Please stay tuned for more details as the launch approaches. If you cannot access your Orion Portal, contact Tracey to request a password reset. The Orion Portal requires a password reset every 4 months (120 days) and becomes Inactive after 8 months (240 days).
• ON A PERSONAL NOTE •
+ Teri's World
I think the seed catalogues are calling me! Are we ready for spring!? I had my 100+ year sewer line replaced last week in my basement. Good thing this only needs done every 100 years. Beyond this project and the cleaning up of the aftermath occupying some of my time this month, I have been helping my son get his house together so he can move-in. It’s a progressive move. I am starting to turn my attention to the demolition of my garage and a new one being built in its place. Given the weather, this won’t be happening for several weeks. 
+ What about Bob
This has been a February to remember! I can’t recall a February with this much snow that has actually stuck around this long. Usually it’s melted in a day or so. 

Grandson update –

 Logan turned 2 on the 11th. His vocabulary is growing like crazy and fun to watch develop. There are small signs that the terrible 2’s are starting to set in. Funny to watch as a grandparent but not fun for Brittany and Chris. They had a low-key birthday party, just the three of them. We cannot believe he is 2 already!

Lowell has now exceeded the 6lb mark and continues to grow and meet his nursing, swallowing and breathing milestones. Ashley is hoping he will be able to come home the first part of March instead of mid-March. We just can’t wait to meet this tough little fighter!

Layla finished her basketball season with only 1 loss. However they were eliminated in the first round of the playoffs!! She was quite disappointed but recovered quickly. She is now playing Club volleyball and really enjoying it.

Please stay safe and warm and enjoy the snow if you can. 
+ Tracey's Time
We are relieved that Cayleigh will return to school daily on March 1st. Receiving Covid notices from school with the frequency of strep throat is unnerving, but our kids need to be back in school, despite our discomfort. We are awaiting the details of the reopening.

We were able to sneak away for a couple of winter fun days this month courtesy of Mother Nature and school snow days. We enjoyed a ski day and a partial day sledding in the Metro Parks. Climbing the icy hill presented some challenges but the ride down was worth the effort.
• POINTS OF REFERENCE •
Current Economic and Investment Information
DO THE MATH - The S&P 500 is up +4.9% YTD (total return) through last Friday 2/12/21. Since the S&P 500 is a cap-weighted index, the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation. As of 2/12/21, the 8 largest stocks in the index (out of 505 individual stocks counted in the index) represent 25% of the total capitalization of the index (source: Slickcharts.com).

SUPPLY AND DEMAND - The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of 4/09/20 as the global impact of COVID-19 was crushing the worldwide demand for oil. As of last Friday 2/12/21, WTI crude oil closed at $59.47 a barrel, its highest closing price since 1/09/20 (source: NYMEX).

MORE IN THAN OUT - For every $1 of goods that US companies exported to Chinese buyers in 2020, American consumers imported $3.49 of goods from Chinese manufacturers (source: Department of Commerce)

IT’S AN INDEX - Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. The category “food” within the CPI calculation was up +3.9% for the year, “medical care services” was up +2.8%, but “energy” was down 7.0% last year (source: Department of Labor).

WILL YOU NEED TO WORK? - Even though 1 of 4 current retirees (27%) have held a job for pay during their retirement years, just under 3 of 4 current workers (74%) anticipate they will hold a job for pay during their upcoming retirement years (source: Employee Benefit Research Institute 2020 Retirement Confidence Survey).

LET’S SHOOT FOR MORE - A 65-year old American male has a life expectancy of 18.2 years. A 65-year old American female has a life expectancy of 20.8 years (source: National Center for Health Statistics).

HOME EQUITY - Single-family home values in the United States have increased by an average of +10.0% YTD through 11/30/20, likely to result in the first “double-digit” average return for home values nationwide for an entire calendar year since 2004. Data on the change in home values during December 2020 will be released on 2/23/21 (source: Federal Housing Finance Agency).

DREAM HOME - Ground was broken in the United States on the construction of 100,200 single-family homes in October 2020, the largest monthly total nationwide since June 2007 (source: Census Bureau).

HOW WE LIVE - Of the 7.2 million new US households created in the last 4 years, 100% were “owner” households while none were “renter” households, i.e., “owner” households grew from 75.6 million (12/31/16) to 82.8 million (12/31/20), while “renter” households remained flat at 43.0 million (source: Census Bureau).

WE’RE DOWN, THEY’RE DOWN A LOT - The US economy fell 3.5% in size during calendar year 2020. The collective economies of the 19 countries that use the Euro as their common currency, i.e., the Eurozone, fell 6.8% in size during calendar year 2020 (source: Department of Commerce, Eurostat).

BLUE CONTROL - The House of Representatives is currently made up of 221 Democrats, 211 Republicans and 3 vacancies. 2 of the 3 vacancies are in Louisiana, and a 3rd is from Texas (source: House of Representatives).

ALL DONE WITH MY WORK - An average American worker has increased his/her productivity by +50% in the last 21 years, i.e., an average worker can complete in 2 hours as of 12/31/2020 the same amount of work that it took him/her 3 hours to finish as of 12/31/1999 (source: Department of Labor).
Visualizing How COVID-19 Has Impacted
Global Wages

By Avery Koop
Visual Capitalist
It's now been about one year since we all started to experience the impact of Covid in our lives.

In the years leading up to the pandemic, annual global wage growth was fluctuating stably between 1.6%–2.2%. Now, income, working hours, and employment have all been impacted by COVID-19—but for those who have held onto their jobs, how have wages been affected?

An interactive version of this chart from the International Labour Organization (ILO) reveals how the global pandemic has affected both nominal and real wages, as well as unemployment rates country by country.
• TIMELY TOPICS •
Container Shortages Drive Up Commodities

By Joe Wallace
The Wall Street Journal
It has rarely been more expensive to move sugar, coffee and copper around the world by sea.

Ocean freight rates began to soar last summer, and haven’t let up. That is partly because consumers, unable to spend money in restaurants, have splashed out on goods that move by sea. Retailers and manufacturers, meanwhile, have rushed to rebuild inventories.

The shortage of 40-foot steel shipping containers has snarled global supply chains for commodities, hiking prices for some raw materials. That is of interest to investors and economists, who have been on the watch for signs of inflation after governments and central banks flooded markets with cash to bolster the pandemic-hit global economy. So far, there hasn’t been a big increase in consumer prices.
Trading houses, though, are feeling the pinch. Firms such as U.K.-based metals merchant RJH Trading Ltd. are paying lofty rates to secure berths on vessels. They face delays before loading cargoes at ports in Asia, where the dearth of boxes is most acute.

Normally, it takes RJH between 30 and 40 days to get tin and antimony, a silvery metal used in the electronics industry, from Asia to Europe, said managing director Charles Swindon. In recent months, RJH has waited for several weeks to find containers at ports in China, lengthening the journey time to 70 days. Freight costs are three to four times higher, he said.

“The main reason why it’s feeding through to the metals price is [that] freight has to be paid for,” Mr. Swindon said. “There isn’t the ability to ship metals out of not just Asia, but from anywhere at the right place and the right time.”

Transportation costs are a key part of the calculus for commodity traders. They make their money from moving large volumes of material to take advantage of narrow differences in prices in different regions and at different times. The traders are looking to pass on elevated container costs to buyers, a sign of the inflationary pressures being spotted in some corners of the market.

The container shortage is another reason, along with the rebound in energy prices, why inflation is likely to accelerate in the coming months, said Neil Shearing, group chief economist at Capital Economics. Still, he expects the effect on consumer prices to be short lived. Demand for containers will drop if consumers revert to spending less on goods and more on services such as entertainment, Mr. Shearing added.

Difficulty sourcing containers has added impetus to commodity prices, which are already buoyant thanks to resurgent demand from sectors like the car industry. Copper prices have rallied 80% since their low last March and stand at almost nine-year highs. High container rates are prompting traders to charge more.

“We are paying quite a bit more to secure regular container space,” said Mark Hansen, chief executive of Concord Resources Ltd, which transports half of the refined metals it moves by container ship. “Ultimately, it’s an inflationary cost. You’re going to pass it along.”

Not all commodities are transported in containers. Coal, iron ore and grains move between continents on vessels called bulkers. Materials like white sugar, coffee and aluminum are often shipped in boxes to prevent damage.

Despite a bumper sugar crop in India, the world’s second-biggest producer of the sweetener, traders have struggled to source containers to export it. The market has responded by pushing prices for refined sugar further above those for raw sugar, according to John Stansfield, a trader at Group Sopex.

“It’s just the logistics of getting it out [of India] into the world market,” Mr. Stansfield said.
Traders moving goods from East Asia to Europe are paying more than six times what they did last April. Rates between the two regions shot up to $8,455 per 40-foot container on Wednesday, according to an index compiled by Baltic Exchange and Freightos, an online freight marketplace. That is the highest level recorded since the index was launched in 2016.

At $4,709 per container, rates from Asia to the U.S. West Coast are almost four times higher than they were in March 2020. For taking goods to the East Coast, rates have more than doubled to $5,658 per container.

Rampant demand isn’t the only reason for the container shortage. Health precautions and coronavirus cases among workers have slowed the flow of boxes through ports, reducing the pool of available containers. Dozens of cargo ships are queuing to discharge at the ports of Los Angeles and Long Beach.

London-based D.R. Wakefield began to experience severe problems moving coffee out of Vietnam—the world’s second-largest producer of the bean—in late January. Five of the shipping companies the trading house works with said they couldn't ship out of the southeast Asian country, said trader Guus Bremer.

Analysts said transportation costs are likely to remain elevated. “At each stage, everyone has thought this can’t keep up,” said Judah Levine, research lead at Freightos.
Lumber Hits Records on Building Boom

By Ryan Dezember
The Wall Street Journal
Lumber prices have shot to fresh records, defying the normal winter slowdown in wood-product sales in a sign that the pandemic building boom is bowling into 2021.

Records have been set across species, products and grades, according to pricing service Random Lengths. It has never cost more to buy oriented strand board, known as OSB and used for walls, Southern yellow pine, which is favored for fences and decks, or ponderosa pine, which is popular in cabinetry and interior trim.

Many engineered wood products used in new construction, such as I-joists, are in short supply, and mills are backlogged with orders well into March, the pricing service said. Last week, its Random Lengths Framing Lumber Composite price rose to $966 per thousand board feet, exceeding the $955 high set in September.
Lumber futures have climbed 49% over the past three weeks, to more than twice the price a year earlier. Lumber for March settled Tuesday at $992.40 per thousand board feet, eclipsing a mark set in September as the highest closing price ever.

Many buyers have jostled into contracts for May delivery, which ended Tuesday at $846.50. The cheapest and most distant futures, for lumber in March 2022, start at $700, which is more than the prepandemic record of $639.

“We don’t expect these prices forever, but what we are seeing is a bit of acceptance that maybe going forward the price level may be different than it has been in the past,” said Chris Virostek, finance chief at West Fraser Timber Co. , North America’s largest lumber producer.

Shares of West Fraser, which acquired leading OSB-maker Norbord Inc. earlier this month, have more than quadrupled since stocks bottomed last March when the economy was shut down to slow the spread of Covid-19. The S&P 500 has gained 75% in the same span.

Mills shut down and choked back output at the pandemic’s onset, reasoning that widespread job losses would wipe out what was looking like a promising spring for home-building. They were wrong.

Stuck-at-home Americans undertook home-improvement projects. Builders faced a stampede to the suburbs, brought on by record-low mortgage rates and people looking for more living space. New York City’s bars and restaurants built outdoor seating so that they could stay in business. Lumber prices shot to new heights.

West Fraser and rivals such as Weyerhaeuser Co. and Interfor Corp. haven’t caught up, despite ramping mills back up to capacity.

In autumn, prices dropped on another erroneous assumption: that building season was winding down. Prices rose anew in November as home builders hammered through mild weather.

Housing starts as well as building permits for private-owned residential units rose in December to their highest levels since 2006, when the bottom was falling out of a yearslong housing boom.

Now, a severe cold snap that settled over much of the continent is disrupting lumber deliveries from Canada while dealers and retailers are stocking up for spring. Strong wood prices in Europe have prevented a flood of imports from dousing the domestic price rally.

Housing affordability is the primary threat to the lumber rally, Weyerhaeuser Chief Executive Devin Stockfish told investors recently.
Home prices are on their fastest climb since the run-up to the housing crash 15 years ago. The frenzy has helped builders protect their profit margins by raising prices on everything from mobile homes to McMansions.

“This is a disruptive and difficult process for the plants, dealers and ultimate home buyers,” said William Boor, chief executive of Cavco Industries Inc., a Phoenix firm that builds modular homes. “So far we’ve been able to keep up.”

The average price of the 7,056 houses that PulteGroup Inc. sold in the fourth quarter was $462,000, up 7% over the year-earlier period, and the builder’s executives say prices are headed higher because of lumber costs.

AvalonBay Communities Inc. said that it has $750 million worth of new apartments on the drawing board. Whether the suburban developer starts all of them depends on lumber costs.

“If lumber pricing doesn’t adjust back to where we would expect it to, some of those starts may be in question,” said Matthew Birenbaum, AvalonBay’s investment chief.

On another front—the shelves of Lowe’s and Home Depot —soaring home prices are supporting lumber’s lofty prices. Rising property values tend to encourage homeowners to undertake renovations. The added home equity can be borrowed against to pay for patios and new kitchens.

U.S. homeowners with mortgages collectively gained about $1 trillion in home equity in the 12 months that ended Sept. 30, according to real-estate data firm CoreLogic Inc.

“Household balance sheets are pretty spectacular right now, and there’s some disposable income that isn’t going into cruises and holidays,” said Bart Bender, Interfor’s senior vice president of sales and marketing. “Yeah, lumber costs a little bit more, but there certainly seems to be a number of people that are pretty focused on improving their homes.”
Everything Teens and College Students Need to Know About Filing Taxes This Year

By Ingrid Case
Money.com
Taxes may be an inescapable bane of being a working adult. But teens and college students shouldn’t ignore their W-2 forms, either. While a full-time high school or college student who earns money via a part-time or summer job might not need to file a tax return, spending a few minutes filling out the forms can mean significant financial benefits.

Click here to continue reading this article.
• QUOTE •

“The best and most beautiful things in the world cannot be seen or even touched - they must be felt with the heart.”

- Helen Keller
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Registered Investment Advisor
This material is distributed by Alexander Financial Planning, Inc., (AFPI) and is for information purposes only. Although information has been obtained from sources to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of AFPI and are subject to change without notice. AFPI assumes no liability for the interpretation or use of this report. Financial planning, investment conclusions and strategies suggested in this report may not be suitable for all investors and consultation with a qualified advisor is recommended prior to executing any investment strategy. All rights reserved.
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