From the Desk of Dale Crossley and Evan Shear
We hope that you and your loved ones are healthy as we’ve ushered in 2021. We were all eager to leave 2020 in the rearview mirror and look forward to a brighter 2021. Although the pandemic is still impacting us as much as ever, more Americans are getting vaccinated and that’s a positive way to start the year. However, despite the good news about vaccines, as we speak with clients, what we’re seeing on the news is accurate - vaccines are still in short supply. Between healthcare workers, frontline workers and the most vulnerable populations, there’s just not enough supply to go around and it may be early summer before everyone who wants a vaccine gets one. Of course, we’re all rooting for the vaccine production and administration process to speed up, most importantly to save lives, but also to fully restart the economy and begin to see a strong recovery.
Besides the urgency of people seeking vaccines, we’re having many discussions with clients concerned about the proposed tax changes in the new Biden administration and what they might mean for the markets and the economy at large. We definitely anticipate some tax changes with the Democrats holding the balance of power, initially through the budget reconciliation process and then perhaps in later bills. Among some of the proposed changes are several tax increases for those earning over $400,000 per year, lower thresholds for estate tax exemptions and an increase in the corporate tax rate to 28% from 21% (reversing the Tax Cuts and Jobs Act of 2017 decrease from 35% to 21%).
Although the markets generally prefer a balance of power in Washington, this is not the first time that one party has had control over the House, Senate and White House. As you may recall from our article and video, “The Truth About the Presidential Election and Your Portfolio,” historically, the markets have performed equally well under both Democrats and Republicans. Still, with all the chatter in the media, clients are understandably concerned about the market impact, particularly after last spring. We want to take this opportunity to stress that we carefully develop your financial plan for the long-term, fully expecting ups and downs in the market. The cornerstone of your plan is our use of Voyage, a proprietary scoring process that provides us with disciplined and unemotional “buy” and “sell” signals as the market changes. We use those signals to move client assets between stock, bond, sector, money market mutual funds and exchange-traded funds. Although it’s sometimes difficult to resist, knowing you have a plan in place with hopefully curtail the temptation to make emotional decisions.
We’re here to help you navigate any potential adjustments that need to be made to your financial plan or estate plan due to tax changes. We’re also here as the markets continue to fluctuate from many factors - it’s what we expect and prepare for in our planning. Please don’t hesitate to reach out with any questions or concerns.
We look forward to a better 2021 for all!
Evan Shear Dale Crossley, JD
CERTIFIED FINANCIAL PLANNERTM Financial Planner
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