The Cox Connection

Vol 4 Issue 2 ||April 2021

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Market Performance as of 3/31/21

  • S&P 500 TR: QTD 6.17%
  • Dow Jones Industrial Average TR: QTD 8.29%
  • MSCI EAFE (International Stocks): QTD 3.48%
  • MSCI Emerging Markets: QTD 2.29%
  • Bloomberg Barclays US Aggregate Bond: QTD -3.37%
  • Bloomberg Barclays Global Aggregate Bond: QTD -2.47%

Diversification remains vital to a solid investment portfolio. We saw distinct performance differences between stocks and bonds as well as between growth and value stocks. Value significantly out performed growth in the large cap, mid cap, and small cap arenas. Stocks out performed bonds as expectations for inflation were on the rise. Defensive positions have been favored during this first quarter of 2021.

"We have recently received questions and comments about the Biden administration and what it means for the stock markets. We know that many people may be concerned. Investors should keep in mind that there is no evidence supporting a relationship between presidents and stock market performance. The below graph reminds us that over the last 50 years the S&P 500 index has maintained an upward trend over the long term with alternating power between the two parties.
We still believe in the value of a long-term investment strategy in the market, regardless of which party’s president happens to be in power. No matter what political decisions come about, companies will continue to adapt and evolve so that they become profitable. This leads to a constant supply of investment opportunities in the future."
Cody Cox
"Equities continue to advance as the U.S. economy bounces back. As we see more people getting the COVID vaccinations along with the population getting closer to herd immunity, the general public is feeling more at ease to get out, spend money, and travel. This freedom to shop and travel will continue to help boost the economy and profitability for corporations.
We encourage all clients to review the Pre-Retirement Checklist in this newsletter to help you be prepared for retirement. Your review will possibly highlight an area that needs your attention, or an area we can help you with. It's never too late to start saving for your retirement, nor encourage your children and friends to save also.
As we review our clients accounts and the performance of the managers and models, we are pleased with the results, especially going through the start of COVID during March and April 2020. We have started contacting our clients to set up annual review meetings either in person or by phone call, whichever you prefer. These meetings are important to discuss any changes you may have now, or see in the near future. As always we are available to talk with you, just let us know if you have any needs or questions.
We continue to stay focused on your objectives and are honored to help you meet them. We are especially appreciative of the referrals we get from clients, as we have done for over 35 years, we will always do our best to serve you and any family member or friend you refer to us."
Don Cox

Source: Total returns of the indices mentioned are provided by Morningstar, MSCI, and S&P Dow Jones. None of these firms nor their Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the information on their websites, including, but not limited to information originated by them, licensed by them from information providers, or gathered by them from publicly available sources. There may be delays, omissions, or inaccuracies in the information. Past returns are no indication of future results.


Pre-Retirement Checklist

Getting ready for retirement? Before you can cross that bridge, you’ll need to cross some important items off your to-do list. But thanks to our work together, you might be more prepared than you think! This handy checklist of ten crucial steps can help you visualize how far you’ve come.

  1. Retirement Budget - understand what your income will be, and how you can confidently spend the money you have accumulated for retirement.
  2. Emergency Savings - prepare for emergencies by saving at least 3 months’ living expenses, and have that money easily available to you
  3. Tax Strategy - have a sound tax strategy to guide you through the process of spending money from both taxable and tax-deferred accounts.
  4. Lifestyle and Location - consider where you’ll live, both short- and long-term. Have a plan for funding a move and understand the timing involved.
  5. 401(k) Strategy - have a strategy for your 401(k) plan and determine the best time for you to access the money, based on your goals. (1)
  6. Bucket List - write down your personal goals for your retirement years. Explore your dreams, priorities and values.
  7. Extended Care - make arrangements in the event that you or a loved one encounters a health issue requiring full-time care.
  8. Estate Strategy - develop an estate approach that includes how you want your assets to be allocated, and who will handle your estate.
  9. Health Insurance - understand your options with Medicare and define a strategy for covering health care expenses for the long haul.
  10. Social Security - have a sound tax strategy to guide you through the process of spending money from both taxable and tax-deferred accounts.

If you’re not as prepared for retirement as you’d like to be, just reach out. Together, we can fine-tune these strategies so you can finish your checklist and get started on that bucket list.

(1) Distributions from 401(k) plans and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 72, you must begin taking required minimum distributions.

How Retirement Spending Changes with Time

New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern may be legitimate. Some households "live it up" and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much.

The Numbers

The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of $60,076 per year for households headed by pre-retirees, Americans age 55-64. That figure drops to $45,221 for households headed by people age 65 and older. (2)

Spending Pattern

Some suggest that retirement spending is best depicted by a U-shaped graph -- It rises, then falls, then increases quickly due to medical expenses.

But in a 2017 study, the investment firm BlackRock found that retiree spending declined very slightly over time. Also, medical expenses only spiked for a small percentage of retirees in the last two years of their lives. (3)

What's the best course for you? Your spending pattern will depend on your personal choices as you enter retirement. A carefully designed strategy using our analytical tools can help you be prepared and enjoy your retirement years.

(2.) Bureau of Labor Statistics, 2019 (3.) CBSnews December 26, 2017

stay informed

COVID Related Assistance 2021

Let's reflect back on the COVID related assistance the government has created over the last year.

  1. March 2020 CARES Act 2020 - Coronavirus Aid Relief and Economic Security Act provided an initial round of stimulus of $1,400 per individual and $500 for qualifying child under age 17; all with income limits to receive this stimulus. Those collecting unemployment will receive an extra $600 per week and see an extension in the benefit timeframe.
  2. December 2020 COVID-related Tax Relief Act of 2020 - provided a second round of stimulus of $600 per individual and $600 per qualifying child under age 17; all with income limits to receive this stimulus that matched March 2020 stimulus. Unemployment benefits were extended to March 2021.
  3. March 2021 The American Rescue Plan Act of 2021 - provided a third round of stimulus of $1,400 per individual plus $1,400 per qualifying dependent of any age. Qualifying limits are more strict to receive this stimulus compared to the prior two. Those collecting unemployment benefits will receive a tax break and an extra $300 per week until September 2021.

Economic recovery is well on its way. No matter which political party or belief resonates with you, no one can deny there is a considerable amount of spending that has already been done and is planned for the upcoming year; as recently announced with the infrastructure spending plan. There is no clear plan as to how we will pay for everything. We can expect tax rates to rise as well as inflation rates.

A healthy savings account or cash reserve is important going forward. This will help investors from having to dip into their investment accounts to cover expenses or taxes in the near future.

Source: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-American-families-and-workers

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Cox Global Associates, Inc. || 1260 Pin Oak Road, Suite 204 || Katy, TX 77494 || 281.395.8300 https://www.coxglobalassociates.com/ || info@coxglobalassociates.com

Securities and Advisory Services are offered through Geneos Wealth Management, Inc. FINRA, SIPC. Investment advisory services also offered through Cox Global Associates, Inc., A Registered Investment Advisor.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Articles may be developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.