March 2020
Each month, Wellspring's wealth strategist and advisors will share news and articles to shed light on the current economy, financial markets, and common tasks for maintaining a well-rounded and resilient personal financial plan.

Click on the links below to learn more.
Economic Outlook

Mar 2 - ISM PMI report
Mar 4 - ISM non-PMI report
Mar 6 - Employment report
Mar 17 - Retail sales report
Mar 31- Cons. confidence report

Key observations:
  • In the US, manufacturing picked up in January where the ISM PMI reported above 50 percent following a contraction in December. However, early estimates for February reflected a decrease from the start of the quarter.
  • Manufacturing remains contracted globally. All the while investor confidence remains resilient. Although, news of the coronovirus (COVID-19) each day increases concerns about its lingering impact to world economic output.
  • Unemployment in the US remains low with robust hiring beginning of 2020 that added to job growth. More so, consumer confidence remains positive.
  • Inflation remains underwhelming, below the Fed's target. From the latest meeting minutes, some of the deciphering pointed to potentially more rate cuts of one or more in 2020.
  • The current challenge is containment of COVID-19 and assessing its affect on business activity. Additionally, global trade, political headlines, and corporate earnings remain top of mind.
Financial Markets

Articles of interest:

At the time of writing this newsletter, the market pulled back today, the Dow down almost 4%, as fears of COVID-19 heightened with regions of Europe and South Korea reporting new cases. Goldman may be on to something as the article by Julia Horowtiz for CNN discussed. However, last month's newsletter also highlighted an article written by Matthew Weller for that aptly captures the current panic in the financial markets (read the article here . )

Although the opinion of Mark Hulbert is not unreasonable when going over his main points in the article written for MarketWatch, it should be noted that the author reflected on only one asset class, specifically S&P 500 index. That is to say when taking a holistic approach to investment management, an investor's savings is invested in more than just a single market cap. Opportunity does not lie solely in US equities when taking into account diversification. Adding, based on the investor's personal finances, goals and objectives, risk tolerance, investment time horizon, and liquidity need, the investment portfolio should consider a reasonable expected return given current business cycle and economic prospects. In sum, market return especially when considering the investor should take on a multifaceted approach to achieve the desired outcome.

Despite the ups and downs, over the long term the trend is positive. To paraphrase Dr. Dave Yeske, Director of Financial Planning at Golden Gate University, the global economy is made up of the aggregate of all human actions and through the innate ability to persevere, stay resilient, and ingenuity that propels markets onward. This article by Barbara Kollmeyer further expands on this view with commentary from Barclay's CIO William Hobbs, well worth the read.
Personal Financial Planning

As tax season is in full swing, it is worth mentioning again to review tax documents in hand, be mindful of any missing documents you know were filed in prior years tied to an existing account, and get in touch with a tax professional to schedule an appointment. Closed and new accounts may likely generate a tax report too so be observant. Adding, consider scanning through your inbox since the start o f 2020 to catch any notices that may have fell through the cracks especially for accounts signed up for e-delivery that may have been forgotten.

More so, IRA and HSA contribution deadlines are fast approaching. Contributions to an IRA and a HSA should be deposited by April 15 or earlier.

IRA Limits:
  • $6,000
  • IRA holders 50 and older get to save an extra $1,000, which means $7,000

HSA Limits:
  • $3,500 for an individual
  • $7,000 for a family
  • HSA holders 55 and older get to save an extra $1,000, which means $4,500 for an individual and $8,000 for a family

You may also revisit our February newsletter as a recap to organizing and preparing your tax return, among other tasks to consider during this time of the year.

Articles of interest:

Article written by Sarah Holden for MarketWatch. Note that participation in an employer sponsored qualified plan as well as the household modified AGI will still shape how much deduction a spousal IRA can take as well.

If IRA contributions are completely phased out, another consideration is the Roth IRA conversion through the use of a non-deductible IRA or referred to as the backdoor Roth IRA.

In this day and age, cybercriminal activity is rising. Moreover, there is the ongoing discussion of online privacy further heightening user concerns. Suffice it to say bad actors are looking for opportunities to gain access to both personal and financial information. Retirement savings are now under su ch scrutiny and as the financial industry helps investors stay connected to their accounts, various vulnerabilities open up whether it is at home on the desktop or remotely through smartphone apps. For MarketWatch, Alessandra Malito discussed a few ideas on how to stay vigilant.

Wellspring In Action
Welcome Our New Advisor, Steven!
We want to share exciting news as we add to our existing excellent group of associates a new financial advisor, Steven Eng!

Steven worked in the financial industry since 2014 and holds both series 7 and 66 security licenses. Having worked at both Edward Jones and Ameriprise, Steven is eager to forge new relationships, hear client stories, understand their needs, and come together with a tailored and comprehensive personal financial strategy.
Phone: (408) 435-1668

For additional inquiries, please email us HERE .

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