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Relax and Enjoy
Summer has officially arrived! This is the time to relax and enjoy life and this year should be no exception. Couldn't we all use a dose of carefree, simple pleasures now?

There are many options for summer fun that do allow proper social distancing. Tie up your hiking boots or load up your bicycle and head to a park or trail. Go to a berry farm and cook up something wonderful with your yield. Plan a picnic. It could be as easy as moving your lawn chair to a sunny spot. Do you have better ideas? See them through.

We have been focused on connecting with family and friends from afar. Don't forget your loyal companions. Consider lavishing some TLC on your pet. Even a short walk, play-time, or cuddling can be beneficial for you and your pet. Summer is short.....Get outside!


  • We have returned to a more normal work schedule in the office but continue to social distance from each other within our individual offices. It feels good to get back on track. We hope that the reopening of Ohio is not interrupted by increasing numbers of Coronavirus cases. Should a change to working conditions be necessary, we will let you know.

  • We will 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 soon and this may be decided based upon the number of individuals participating in a meeting.

  • For those that must visit our office, please check in with us prior to visiting. There may be periodic road closures due to construction projects currently underway in the immediate vicinity of the office.

  • Required Minimum Distribution UPDATE - Retirement account holders can return distributed money - The IRS recently issued a notice updating the suspension of RMD's for 2020. The new relief is very broad and offers coverage to everyone. If you have taken an RMD this year, you can return these funds to a tax-deferred account. The deadline for anyone who wishes to return RMD's taken in 2020 is August 31, 2020. This includes distributions taken from inherited IRA's (beneficiary IRAs), distributions taken as monthly installments, and even distributions taken as part of a rollover from one IRA to another within the past 365 days. There are also strategies for recouping the tax withheld from many distributions. Please call the office for more details if you are interested in returning your 2020 required minimum distributions. 

  • AFP offers new service for Goal Driven Wealth Management - We are unveiling a new service for younger people and it is called Goal Driven Wealth Management. Our existing Cash Flow Driven Wealth Management Service is for pre-retirees and retirees needing to manage and preserve their wealth. The Goal Driven service model is geared toward those in the wealth building phase. We are pleased to offer this service to adult children of existing clients at a discounted rate.

  • Orion Portal Password Reset requirement extended - We have extended the password reset time frame for the Orion Portal from 90 days to 120 days. We are considering broadening this deadline further, but do not want to mitigate the security settings of the Orion Portal.
+ Teri's World
It’s been a nice month to kick back a bit and spend time with family and friends. Gene acquired a 2001 roadster from his brother and we have enjoyed some drives in the countryside. My oldest daughter celebrated her birthday at the beginning of the month and we will be celebrating my youngest grandson’s birthday this coming weekend – a big #2! Now that everything is planted in the gardens I have been at war with chipmunks, squirrels, bunnies and deer (vegetable). I don’t remember being so overrun with this problem in the past, but it clearly is keeping me occupied this year! 
+ What about Bob
Bob & Christine had a very good June!! We started the month off by celebrating our 25 th wedding anniversary on June 3rd. What a wonderful and amazing 25 years it has been!! Our daughter Ashley had a birthday on the 12 th . Then we had a very relaxing and enjoyable vacation. We spent 4 days at Lake Cumberland, Kentucky and then 3 days at Lake Norman, North Carolina. This was our “Plan B” trip since our trip to Greece was postponed until 2021. We found several Geodes on the shoreline of Lake Cumberland, I am excited to cut them open to see what’s inside. Hopefully, some nice quartz or agate crystals.
+ Tracey's Time
We considered skipping vacation this summer due to Covid. Then we realized that we haven't had more than 1 or 2 day breaks from work since our trip last June. To say we are overdue for a get-away is an understatement.

As luck would have it, we were able to secure reservations for some gap time in our schedule. Another westward journey is approaching and we are excited to find adventure in the outdoors. This year's itinerary includes Rocky Mountain NP and Grand Teton NP.

The home renovation is mostly complete with only the fireplace wall to finish. It will have to wait because "the mountains are calling, and we must go" as John Muir said.
Current Economic and Investment Information
RECESSIONS - The United States officially dropped into a recession on 2/29/20, its 6th recession in the last 40 years, i.e., since 1980. The announcement confirming the start of this economic downturn was released on 6/08/20, exactly 100 days after the recession started. The next most recent recession in the country began at the end of December 2007 and lasted 18 months through June 2009. The announcement of the 2007 recession was released on 12/01/08, 336 days after the recession started (source: Nat’l Bureau of Economic Research).

THE “CARES ACT” EFFECT - The nation’s 13.3% jobless rate as of 5/31/20 (released on Friday 6/05/20) would have been an estimated 16.3% if the workers who were being paid wages from funds obtained through a “Payroll Protection Program” (PPP) loan were counted as “temporarily laid off” instead of “actively employed” (source: Bureau of Labor Statistics).
OIL REDUCTION - US field production of crude oil was 11.1 million barrels a day for the week ending 6/05/20, the 10th consecutive week of declining domestic oil production. The total decline over the 10 weeks was 1.9 million barrels a day from a peak of 13.0 million barrels a day as of 3/27/20 (source: Department of Energy).
PENSION UPDATE - CalPERS is the largest state pension fund in the country with assets of $395 billion. CalPERS lowered its assumed rate of return, i.e., its discount rate, to 7.0% as of 1/21/20 (source: CalPERS).

FED ACTION - When the Federal Reserve cut short-term interest rates to near zero on 12/16/08 during the global real estate crisis, they did not raise rates again until 12/16/15 or 7 years later. The Fed has once again cut short-term interest rates to near zero, this time on 3/15/20. On Wednesday 6/10/20, Fed Chair Jay Powell said the nation’s central bank has no plans to raise interest rates for possibly as long as 2 ½ years, i.e., through the end of 2022 (source: Federal Reserve).

MORTGAGE RATES - During the 7 years that the Fed kept short-term interest rates near zero between 12/16/08 and 12/16/15, the average interest rate on a 30-year fixed rate mortgage fell from 5.47% to 3.95% (source: Freddie Mac).

KEEP WORKING - 71% of 1,008 American adults surveyed in late April 2020 say that the COVID-19 pandemic has negatively impacted their retirement plans. 51% say that the pandemic has also forced them to be “more open” to the idea of having some type of income-paying job during retirement (source: TD Ameritrade).

MISS THE OFFICE - 1 in 3 American workers (32%) surveyed in May 2020 does not want to “work from home” when the option to return to an office environment is offered (source: Deutsche Bank Research).

RENTS IN BIG CITIES - The median rent for a 1-bedroom apartment in Chicago in May 2020 was $1,097. The median rent for a 1- bedroom apartment in San Francisco in May 2020 was $2,445 (source:

WHERE YOU LIVE - The average single-family home in the USA has appreciated +33.4% over the 5 years ending 3/31/20. Homes in Idaho (+69.6%) have experienced the greatest growth in value while homes in North Dakota (+9.3%) have seen the least percentage increase in value (source: Federal Housing Finance Agency).

FORECLOSURES - The moratorium imposed by Congress to prevent lenders from repossessing homes from delinquent homeowners who have federally back mortgages was extended last week from 6/30/20 to 8/31/20. An average of 9,974 homes per month were repossessed by lenders during the 1st Q 2020 before the ban was implemented. Just 5,490 homes were repossessed in total during April and May (source: Attom Data Solutions).

DOLLAR IS KING - 61% of the world’s foreign exchange reserves, i.e., cash holdings of central banks around world, were held in US dollars as of the end of calendar year 2019 (source: International Monetary Fund).
Nasdaq Outpaces Blue Chips, S&P 500
as Tech Stocks Rally

A handful of growth stocks that have surged this year have an outsize
influence on the Nasdaq and the S&P 500

By Karen Langley
The Wall Street Journal

The divergence in the performance of the major U.S. stock indexes this year is the widest in more than a decade.

A surge in big technology stocks has helped the Nasdaq Composite rally 13% in 2020, while the Dow Jones Industrial Average of blue-chip stocks is down 8.3%. The benchmark S&P 500 is hovering in between them, off 3.1%.

The Nasdaq’s advantage over the Dow and S&P 500 is the biggest since 1983. The gap between the S&P 500 and the Dow is the widest since 2002, when the Dow was ahead.

The Nasdaq continued its outperformance Tuesday, outpacing the Dow and S&P 500 for the day and notching its 21st record close of 2020. The index climbed 0.7%, while the Dow edged up 0.5% and the S&P 500 added 0.4%, driven by improving economic data.

One explanation for the gap in returns: A handful of growth stocks that have surged this year have an outsize influence on the Nasdaq and the S&P 500. Apple Inc., Microsoft Corp., Inc., Google parent Alphabet Inc. and Facebook Inc. together account for about 40% of the Nasdaq and 20% of the S&P. Of those stocks, only Apple and Microsoft are in the Dow.

The disparities add to the challenges facing investors who are trying to make sense of a dizzying stretch of volatility in markets. Valuing stocks became increasingly difficult after the coronavirus pandemic brought the economy to a halt and companies from Caterpillar Inc. to McDonald’s Corp. to PayPal Holdings Inc. pulled forecasts.

Although economic data have improved in recent weeks, many investors expect the recovery to remain uneven and they are bracing for more turbulence as the presidential election season ramps up.

“You really need to triangulate across the three different indexes,” said Susan Schmidt, head of U.S. equities at Aviva Investors. “You can’t depend on any one index.”

The S&P 500 has long been considered the broadest gauge, accounting for about 80% of the available market capitalization of the U.S. stock market. The Dow, on the other hand, comprises just 30 stocks—many of which are economically sensitive—and is weighted by price, instead of market value.

The Nasdaq Composite is generally deemed a tech benchmark, composed of the approximately 2,700 stocks listed on the Nasdaq Stock Market.

The stay-at-home practices adopted to help slow the spread of the virus have accelerated digital trends that have benefited many big tech stocks. Shares of Apple, Microsoft, Amazon, Alphabet and Facebook have rallied this year, led by Amazon’s 50% advance.

Other industries haven’t kept up. The three sectors of the S&P 500 that contain those stocks—information technology for Microsoft and Apple; consumer discretionary for Amazon; and communication services for Alphabet and Facebook—are the only groups in positive territory for the year. The energy, financial, industrial and utility segments are down by double-digit percentages.

“All the big companies are, in some way or another, with almost no exception, heavily focused on some dimension of tech,” said Bob Browne, chief investment officer at Northern Trust. “That has actually been a good thing in terms of return, but it’s not a good thing in terms of diversification going forward.”

Although tech stocks have a similar weighting in the S&P 500 and Dow, at 27% and 26%, some of those in the Dow don’t have the same growth prospects—and that is evident in their share prices. Neither Cisco Systems Inc., which had warned of a pause in customer spending even before the pandemic, nor Intel Corp., which has faced competition from chip-making rival Advanced Micro Devices Inc. as well as manufacturing issues, have reclaimed their dot-com era highs. Cisco shares are off 5.2% this year, while Intel is up 0.1%.

“The fact that the Dow Jones does not have Amazon especially, and then Alphabet and Facebook, definitely has contributed to the underperformance,” said James Ragan, director of wealth-management research at D.A. Davidson.

It is unlikely those stocks, particularly Amazon and Alphabet, would be candidates to join the Dow because their high share prices would skew the index. Amazon’s shares trade above $2,500, while Alphabet’s Class A shares are near $1,500.

The Dow is calculated by adding the prices of the 30 stocks and dividing by a factor that accounts for changes like stock splits. This means that companies with a higher share price hold greater sway, regardless of their total market value.

The S&P 500 and Nasdaq Composite, by contrast, are weighted by market capitalization, so larger companies hold greater influence.

The equal-weighted S&P 500—which gives the same status to both the smallest and largest companies in the index—has underperformed its traditional counterpart this year, falling 11%.

Another issue for the Dow: Only eight of its 30 constituents are up for the year and most of their gains have been wiped out by the slide in shares of Boeing Co. The aerospace company’s shares have tumbled 42% this year due to the slump in air travel prompted by the pandemic and the grounding of its 737 MAX jet.

Boeing’s slide has knocked about 930 points off the index in 2020, erasing most of the 1,151-point contribution from Apple, Microsoft, Home Depot Inc., Visa Inc., UnitedHealth Group Inc., Walmart Inc., Nike Inc. and Intel, according to Dow Jones Market Data.

Its tumble has also tilted the balance of the index away from the industrials sector whose weighting has dropped to 14% from 19% at the start of 2020. The group makes up just 8% of the S&P 500.

The Dow’s underperformance versus the S&P 500 is hardly new. The former has surged 300% from its financial crisis low on March 9, 2009, but has still underperformed the S&P 500’s 363% advance. However, since the 2016 presidential election, the indexes are neck and neck, up 43% and 46%, respectively.

“This has been a market environment where tech has been viewed as a defensive area for investors,” said Kristina Hooper, chief global market strategist at Invesco. “Industrials have largely been left by the wayside, and so that’s reflected in the changing composition of the Dow.”
Value of an Emergency Fund

The past few months have provided a wake-up call for many to re-evaluate their accounts and identify if their financial house is in order. We’ve all realized how quickly life can turn on a dime and knowing you have an emergency fund in place can make all the difference in the world. But what if you currently don’t have this in place right now? Acknowledging this is step one. Achieving it is probably one of the most difficult tasks to cross off your financial “To Do” List, because it does take time and an on-going commitment to obtain this goal. So let’s get started. This article does provide some insight and like so many goals worth pursuing it takes some effort and focus. Just like auto-investing with a 401-K plan, you can set-up an account to auto-invest for an emergency fund. We can’t control everything, but we can work towards this goal to make times like these far less stressful and challenging. It does require a little sacrifice and time short-term, but the reward of having confidence in your financial plan to withstand life’s “what ifs” can make it worth the hard work. 
Coronavirus Has Shown the True Value
of Cash Reserves

Beyond peace of mind, having an emergency fund offers retirement savers a wealth of possibilities in times like these.

by Jaime Eckels, CFP
One of the hardest parts about being a financial planner is convincing people to do things they’d rather ignore.

When times are good, it’s easy for people to avoid putting in place strategies that create some short-term work and discomfort in exchange for long-term benefit and security. That’s why crises like the current pandemic can serve as a valuable wake-up call, taking our advice out of the realm of theory and making it very real.

Estate planning is the prime example. People generally don’t want to think about their own death so they tend to avoid the issue and delay putting a strategy in place for as long as possible. One of my clients had been sitting on his will and other estate-planning documents for over a year by the time the coronavirus came along. Spurred by the all-too-real health dangers of the outbreak, the paperwork was quickly executed.

Emergency Funds to the Rescue

Convincing people to put aside an emergency fund worth at least six months’ of expenses can also be a tough sell in normal times, too. But COVID-19 is turning out to be a very effective test case for why it’s so important to have a cash reserve, both in terms of providing security and opportunity.

A decade of robust economic and jobs growth since the 2008 financial crisis had caused memories to fade and bred some complacency that the good times would continue forever. Suddenly, widespread job losses, combined with stock market plunges, have provided a visceral reminder of why building a cash cushion is such a simple but powerful strategy.

Having enough cash to make it through at least six months allows people to feel a much higher level of comfort at a time of job cuts, pay cuts, furloughs, and a generally uncertain outlook. It also avoids the need to dip into investment portfolios during a down market or, worse, take costly early withdrawals from pre-tax retirement funds. Sure, the pandemic is also  easing restrictions on required minimum distributions  and eliminating penalties for those who need cash fast, but even with those incentives it’s not as if most people want to tap into their 401(k).

Beyond Security, Extra Cash Also Holds Possibilities

That much is fairly obvious. Less well understood is how a healthy cash reserve also provides opportunities to gain during volatile times. Contrary to what might be expected, most of the conversations I have had with clients during the worst period of market falls leading up to the March 23rd bottom — or what counts as the bottom up until this point at least — weren’t prompted by panic.

Many of my clients had come into this year wanting to deploy cash into the market but were wary of going all in due to concerns that the markets were reaching all-time highs and a correction was overdue. As a result, we helped them develop dollar-cost averaging strategies over 12-18 months to reduce their vulnerability to a downturn.

When that downturn came — more brutal and sudden than anyone expected — many of those clients reached out to us with a positive attitude, sensing opportunities for immediate action. With the market around 35% off its February highs at one point, some of them wanted to front-load their strategy to put more of their cash reserves to work.

This isn’t about pushing a more aggressive strategy on any client — dollar-cost averaging isn’t for everyone, and neither is it necessary to suddenly revise a well-laid strategy simply because of a shift in the macro environment.

These changes were simply the result of check-ins with those who’d already identified dollar-cost averaging as a strategy to accommodate their risk tolerance and to reaffirm their comfort level with their investment strategy in light of the current circumstances. For financial advisers, big market corrections are an opportunity to truly gauge a client’s risk tolerance. A client who was stoic about the idea of a 25% portfolio loss during an investment policy discussion may now be losing sleep as it happens in real life.

In our experience, clients are mostly holding steady with their current strategies or increasing their stock holdings. Of course, although the S&P 500 index roared back nearly 30% since March 23rd, there’s no guarantee it won’t retest its lows and fall further in the coming months. But unlike in the depths of the 2008 financial crisis, people see a clearer end-game to the pandemic, even if there are difficult days ahead.

The Bottom Line on Cash Reserves

The advantage of having cash reserves at times like this is not about being able to time the market bottom, which is outside of everyone’s control. It’s about peace of mind and the flexibility to invest in a way that takes advantage of opportunities in line with your risk tolerance. Having cash on hand gives an additional element of malleability to build strategies around dollar-cost averaging, asset allocation and risk exposure.

Those are the things that are actually within our control during the moments when it feels like nothing else is.

"Life is 10% what happens to you
and 90% how you react to it. "

- Charles R. Swindoll

Alexander Financial Planning
1621 W. First Avenue
Grandview Heights, OH 43212

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.