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Major Indexes For Week Ended 6/26/2020

Index Close Net Change % Change YTD YTD %
DJIA 25,015.55 -855.91 -3.31 -3,522.89 -12.34
NASDAQ 9,757.22 -188.90 -1.90 +784.62 8.74
S&P500 3,009.05 -88.69 -2.86 -221.73 -6.86
Russell 2000 1,378.78 -39.85 -2.81 -289.69 -17.36
International 1,779.71 -24.03 -1.33 -257.23 -12.63
10-year bond 0.63% -0.06% -1.29%
30-year T-bond 1.37% -0.10% -0.99%
International index is MSCI EAFE index. Bond data reflect net change in yield, not price. Indices are unmanaged and you cannot directly invest in an index.

Stocks Swing Wildly As Economic Recovery Begins

(Friday, June 26, 2020, 7 p.m. EST)While consumer sentiment survey data released today confirmed the economy is fighting to come back from the epidemic-induced shutdown, stock prices are continuing to swing wildly.

The University of Michigan's survey of consumer sentiment improved for the second month in a row.

Disposable personal income (DPI) per capita backed off from last month's history-making surge, but remained much higher than the historical norm.

DPI in April surged when Americans received government payments mandated by CARES Act, the federal emergency aid law enacted on March 27, 2020 in response to the Covid-19 crisis.

In May, DPI declined considerably as federal aid began to run out, but DPI was still way beyond normal and was having a material impact on the saving rate of U.S. households.

Yes, the savings rate declined from 32% in April to 23% in May, but it remained extremely high at the end of May.

Americans are sitting on a cash horde! They're not spending CARES Act payments because they're stuck at home.

Stock prices have swung wildly since the crisis started in March and volatility is to be expected in the months ahead.

On Friday, the Standard & Poor's 500 (S&P 500) index fell by -2.4%, to close at 3,009.05, -2.9% lower than a week ago, and +29.4% higher than the March 23rd bear market low.

The S&P 500 index closed two weeks ago with a +4.8% weekly gain, which followed a 3% gain and a 3.2% gain a week earlier.

Assets invested for life need not be influenced by the near-term risk of the virus crisis, which continues to fluctuate and attract speculation.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial situation, or particular needs. Product suitability must be independently determined for each individual investor.

This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.

A Constellation Of Facts Squarely Aligns With 2020 Roth IRA Conversions

(Wednesday, June 24, 9 p.m. EST) An unusual confluence of financial, tax and investment events make converting traditional retirement account assets to Roth IRAs compelling in 2020 to retirees and those about to retire.

At a time when retirement income planning has never been so important to so many Americans, or as complex, retirees and those about to retire have a significant tax opportunity. A constellation of factors have aligned to make converting assets in traditional retirement accounts and IRAs to Roth IRAs suddenly more appealing.

Background. Tax laws affecting retirement income were reformed massively and frequently just before the virus crisis.

On January 1, 2020, just before the Covid-19 outbreak hit the U.S., a sweeping law correcting inequities in 401(k), 403(b), and other federal retirement accounts, became effective. SECURE Act was a bipartisan tax reform law correcting inequities in retirement accounts qualified for favorable tax treatment under federal tax law. To complicate things, two years before SECURE Act, the Tax Cuts & Jobs Act, a total rewrite of federal tax laws, became effective January 1, 2018.

Amid the unprecedented flurry of tax reform laws, and while those laws were still being digested, the pandemic hit. Responding to the Covid crisis, the U.S. Government once more enacted new tax laws for individuals and businesses, in a massive $2.2 trillion emergency aid package.

The Nub

Coincident with multiple layers of tax changes, pandemic economics forced yields to plunge to a low unprecedented in modern U.S. history, which, along with high stock volatility, drastically changed the math around Roth IRA conversions.

Retirees and those about to retire who have faithfully saved and are in strong financial condition have an extraordinary opportunity to plan strategically for the long run.

The unusual confluence of financial, tax and investment fundamentals conspiring to make Roth conversions more compelling presents an important financial planning decision that harbors some risk and requires personal advice beyond the scope of this article. If you have questions about your personal situation, please contact us.

The above referenced information was obtained from reliable sources, however Lantern Investments, Inc. and Lantern Wealth Advisors, LLC cannot guarantee its accuracy. Opinions expressed herein are subject to change. Past performance is no guarantee of future results. Asset allocation and diversification do not assure a profit or protect against losses in declining markets. Any information given on the site is informational and illustrative but does not recommend actions as the information may not be appropriate to all situations. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. Links to other sites are provided for your convenience. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not endorse, verify or attest to the accuracy of the content of the web sites that are linked and accept no responsibility for their use or content. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not provide tax, accounting or legal advice.