February Newsletter to Clients

Enjoy this month’s edition that features a reminder of tax documents from Schwab, plus some commentary about stock market performance.

2023 Tax forms: 

You will be receiving two Form 1099s for your accounts that transitioned from TD Ameritrade to Schwab: 
•    One from TD Ameritrade—for pre-conversion reportable activity
•    One from Schwab—for post-conversion reportable activity
Delivery of both forms will follow your paperless preferences for Form 1099s. If you are enrolled for paperless delivery, you will receive a notification when your tax forms are available on SchwabAlliance.com, or you will receive tax forms via mail if you have selected to receive paper statements. As always, please call the office at 859-268-1117 if you have questions. 

How the stock market performs under Republicans and Democrats:

If you’re like me, you’re already sick of all the election season jabbering from both sides. Furthermore, some “financial professionals” are preoccupied with selling their advice on how to position our portfolios to make the most of the upcoming presidential election. With that in mind, I recently saw an analysis of stock market performance since 1990 in both Democratic and Republican administrations. 

Their conclusion: “It can be difficult to devise an investing strategy based on who is or could be in the White House.” 

Average returns were higher in all stock sectors – types of companies – during Democratic administrations (19 years) than Republican administrations (15 years). But, they explain, the analysis is skewed by 2008, which was the worst performance year since 1990 for 8 of the 11 sectors. So, they said, “it is very difficult to discern performance patterns under different administrations that could reliably repeat themselves in the future.” 

Their advice? “Investors should focus on the fundamentals in the economy and markets and practice a disciplined approach.” Thanks, J.P. Morgan, that’s exactly what Moneywatch Advisors intends to do. We create specific investment strategies for each of our clients to help them reach their individual goals, regardless of the noise around us. 

2024 stock market predictions:

We have written before about the futility of predicting stock market returns. But, that doesn’t mean it isn’t fun to examine what “experts” are predicting for this coming year. Barron’s recently canvassed six market strategists about their market forecasts. Here is what they said, on average:

•    Their average year-end S&P 500 target was 4838. For reference, it stood at 4865 on February 1;
•    The ranges of those surveyed went from a low of 4500 to a high of 5400;
•    On average, the strategists see the yield on the 10-Year U.S. Treasury Note at 3.90% by the end of 2024. It sits at 3.89% on February 1;
•    The 10-Year is important as a benchmark for interest rates on mortgages as well as fixed-income mutual fund yields. 

Keep in mind, these are predictions on just two types of our investments and don’t include predictions for areas such as U.S. mid and small stocks, nor real estate or international stocks. Most clients contain all of those types of investments in order to properly diversify their portfolios. 

Ramsey Bova, CFP®
Owner and President
 
Thank you for your continuing confidence.