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Registered Investment Advisor
900 Walt Whitman Road, Suite 208
Melville, NY 11747
(631) 923-2485
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Investment Newsletter - Q4 2020 |
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Greetings!
First and foremost, we hope this finds you well. To say 2020 has been a tumultuous year so far, would be a severe understatement. As we enter into the final three months of the year, it is fully expected to remain that way, if not more so.
That stated, the question may then well be, should we panic and assume the worst? In a word: NO. That is not to say it will not be volatile. We are faced with a historic election, Supreme Court fight, and of course the ongoing COVID-19 battle that will all be gearing up.
The reason why we strongly suggest not to panic, at least in terms of the stock market in particular, is that all of the issues mentioned above are known issues. They are "known unknowns". When the stock market goes down suddenly and dramatically often it happens due to a something not on the radar screen. All of the items, while we do not know for sure how they will play out, many people, companies, and investors are already accounting for various worst case scenarios that can happen, so a lot of that is already priced into the market. If it ends up that if some, or even all of the issues ahead of us turn out to be better than expected, then it can be further fuel for the market to keep rising. As we often state, the short-term is very tough to make a reliable prediction, while your long-term goals is where to remain focused.
Regarding the economy and the stock market, we give you our thoughts, specifically on the past quarter and outlook further below. If you would like, we also have a link to the executive summary of the Q4 2020 Global Market Outlook by Russell Investments, click here* , as well as a report from State Street Global Advisors with interesting information along with data from past Presidential elections: click here* .
*Please note, when you click, then scroll and click the link underneath the applicable picture (Russell Investments and/or State Street Global Advisors/SPDR) to download the pdf of the article.
In this issue of our Investment Newsletter:
- Schwab-TD Ameritrade deal set to close
- Recent articles that Landmark Wealth Management was quoted in the press. These articles were: "How to get life, disability insurance after losing your job", "Retirement is no time to coast. Revisit your plan to see if you are on track", and "Don't let FOMO guilt you into overspending for holiday gifts".
- An overview of recent market activity, along with "Our Perspective"
- A recap of the performance of major market indices from the past quarter
- Upcoming Economic Calendar
You will find past investment articles, directly on our website, found under the Articles tab.
If there is a topic of interest you would like to see covered in the future, please reply back to this email to let us know, or click here. Likewise, if you have any questions on this or anything else, feel free to reply back.
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Schwab-TD Ameritrade Deal to Close Oct. 6
As people are most likely aware, Charles Schwab has acquired TD Ameritrade. “As all necessary approvals of the proposed acquisition have now been received, Schwab expects to close the transaction on Oct. 6, subject to the customary closing conditions set forth in the merger agreement,” it said in a statement late Wednesday.
For our clients, we expect this transition to be relatively seamless, and will of course keep people informed along the way.
The full integration of the two firms — which announced the transaction 10 months ago — should take 18 to 36 months to complete after the deal officially closes. This means the technology tie-up and related efforts won’t be done until April 2022 at the earliest and by October 2023 at the latest.
Until then, Schwab and TD Ameritrade will operate as separate businesses.
The two brokerage firms had a total of $6.1 trillion of client assets in August. In June, the combined assets handled by their registered investment advisor, or RIA, clients was $2.6 trillion — of which $1.9 trillion was at Schwab and $700 billion at TD Ameritrade. Total assets at TD Ameritrade were about $1.5 trillion on June 30, compared with some $4.1 trillion at Schwab.
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Recent articles where Landmark Wealth Management has been quoted in the press
The past few years, Landmark Wealth Management has been quoted in the press for various articles. We have decided to start sharing these when they happen. If curious about past times we were mentioned, you can see it on our website under Articles > In The Press, or simply click here.
From an article that was originally printed in Newsday this August, we thought you may find this of interest: "How to get life, disability insurance after losing your job". To access this article, please click here.
From an article that was originally printed in Newsday this September, we thought you may find this of interest: "Retirement is no time to coast. Revisit your plan to see if you are on track". To access this article, please click here.
"Don't let FOMO guilt you into overspending for holiday gifts"
And finally from Newsday this past week was this article: "Don't let FOMO guilt you into overspending for holiday gifts". To access this article, please click here.
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Investment Topic
Value vs. Growth: Which is Better?
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Our Perspective on Recent Market News and Activity |
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Our synopsis of the past quarter, a look ahead, and putting it all in perspective: |
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As we head into the 4th Quarter of 2020, I know that we speak for many when we say we are looking forward to turning the calendar to 2021. Clearly 2020 has been a year to remember, but for most it is a year that we would all like to forget and get it in the rear-view mirror as soon as possible. However, we are here to say, “Ladies and gentlemen, the pilot is asking you to sit down and put on your seatbelt because turbulence is ahead. The good news is that it will not last forever, we will get through it, and smoother skies are ahead”.
It should come as no surprise, but one of the key things that the market does not like is “uncertainty”. Currently we have two big levels of uncertainty in the form of the upcoming presidential election and the potential for another long winter with Covid-19. The pessimist would say, “All of this uncertainty is just too much and that we are in trouble”. The optimist would say, “I can see the finish line, I look forward to life hopefully getting back to a more normal level, and a robust recovery ahead”. We would side with the latter. Over time, the markets and the economy are very resilient. As clarity comes to these two big issues, it will allow for companies to thoughtfully plan based upon what the future rules and laws will be. Consumers will always want/need to buy a car, to buy food, a new phone, take a trip somewhere, etc., regardless of who is in charge. This means that many companies will continue to grow and increase their value. The key is to never allow short term noise to derail you from your long-term plans. When markets move, they can move very quickly, and you need to be invested in order to participate in that growth.
From a historical perspective, investors benefit by ignoring all the political noise. If one looks at the performance of a 60/40 portfolio from 1860 thru 2018, there is no statistical difference in returns between having a Democrat or Republican president. The annual compound return for a Democratic president (65 periods) is 8.4% and the annual compound return for a Republican president (94 periods) is 8.2%.
State Street Global Advisors who manages the SPDR ETF’s, put out a very good and comprehensive review of the historical results of past elections, including the various scenarios of unified or split government and that information can be accessed by clicking on the following link: click here. Please note, when you click, then scroll and click the link underneath the SPDR/State Street Global Advisors picture to download the pdf of the article.
From an investment standpoint, it is worth noting that year to date, large cap U.S. growth stocks have led the way, however not all asset classes have recovered to the same degree. To date through the end of the 3rd quarter, most large cap value, mid-cap, small-cap, and international stock asset classes remain negative, and we envision that there will be at some point in the near future there will be more of a cyclical rotation back into some of these previously mentioned asset classes which will lead to a more balanced return.
As for COVID-19, there remains some uncertainty around the duration of this global pandemic. The good news is there have been improved treatment options and several promising vaccines appear to be on the short-term horizon. While much is still unknown about this virus, if history is a guide it will eventually go away, and we can start to get back to normal. Some estimates are that it will take until the end of 2021 for U.S. GDP to return to pre-COVID levels however keep in mind the market always moves in advance of the economy. Thus, our feelings is that investors should stay calm, stay the course, and better days are ahead once we get through some of this short-term noise. It is easier said than done at times, we fully acknowledge that, however investing should always be about the long-term.
We are here and available for any appointment requests, and those appointments can be in person, via a phone conference, or Zoom meeting. To all of of our clients, if we have not updated your financial plan in the past year, please set an appointment so that we can make sure that you are still on track. For everyone, we wish you safety, health and prosperity as we begin this last quarter of 2020.
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Below is the Q3 '20 price return performance of some of the major indices: |
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On the Investment Horizon |
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Upcoming Key Dates on the Economic Calendar
- First Friday of each month: Unemployment report for the prior month, released at 8:30AM.
- Wednesday, October 7 - Federal Open Market Committee (FOMC) releases minutes of previous meeting at 2PM.
- Monday, October 12 - Columbus Day: US Bond Market closed.
- Thursday, October 29 at 8:30AM - GDP, 3rd quarter (advance estimate).
- Tuesday, November 3 - Election Day.
- Wednesday, November 4 - Thursday, November 5: The Federal Open Market Committee (FOMC) meets, and releases their announcement on Thursday at 2PM.
- Wednesday, November 11 - Veterans Day: US Bond Market closed.
- Wednesday, November 23 at 8:30AM - GDP, 3rd quarter (second estimate).
- Wednesday, November 25 - Federal Open Market Committee (FOMC) releases minutes of previous meeting at 2PM
- Thursday, November 26 - Thanksgiving Day: NYSE closed.
- Tuesday, December 15 - Wednesday, December 16: The Federal Open Market Committee (FOMC) meets, and releases their announcement on Wednesday at 2PM.
- Friday, December 25 - Christmas Day: US Markets closed.
- Friday, January 1 - New Year's Day: US Markets closed.
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If you desire an appointment, have any questions on any of this material, or any other financial subjects may relate to your own financial circumstance, please reach out to us at the contact information below:
Sincerely,
Direct phone: 631-923-2485
This communication is from Landmark Wealth Management, LLC, a Securities and Exchange Commission Registered Investment Advisory firm. The information in this email is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax, legal, or investment advice from an independent professional / financial advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Information and use of materials contained in this email, including text and attachments, is confidential and is for the use of the intended recipient(s) only. If received in error, you are hereby notified that any dissemination, distribution, or copying of this communication, or any of its contents, is strictly prohibited. If you have received this communication in error, please reply to the sender and delete the original message and any copy of it from your systems. Be also advised that email communications are not secure. All e-mail sent to or from this address will be recorded by the Landmark Wealth Management, LLC email system and is subject to archival, monitoring, and inspection pursuant to securities regulations. Please direct any matters regarding this policy to [email protected]
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Landmark Wealth Management, LLC
900 Walt Whitman Road, Suite 208
Melville, NY 11747
(631) 923-2485
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