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The Cox Connection

Vol 4 Issue 4 ||October 2021

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CAPITAL MARKET UPDATE

Market Performance as of 9/30/21

U.S. SECURITIES

  • S&P 500 TR: QTD 0.58% YTD 15.92%
  • Dow Jones Industrial Average TR: QTD -1.46% YTD 12.12%
  • Bloomberg Barclays US Aggregate Bond: QTD 0.05% YTD -1.55%
  • Top 3 US Sector Performers 3Q: Financials, Utilities, and Healthcare
  • Worst 3 US Sector Performers 3Q: Industrials, Materials, and Energy

FOREIGN SECURITIES

  • MSCI EAFE (unhedged International Stocks): QTD -0.45% YTD 8.35%
  • MSCI Emerging Market (unhedged): QTD -8.09% YTD -1.25%
  • Bloomberg Barclays Global Aggregate Bond Hedged: QTD 0.09% YTD -1.43%
Market Thoughts - Don Cox

Inflation is here, the question is what to invest in and how rapidly will it affect your income versus your expenses. Only a few times in the last almost 40 years has inflation had a huge impact on living expenses and how people are going to manage their needs with rising prices. The 1970’s brings back memories. That period of inflation hurt people's retirement and those wanting to buy homes, hard assets, or people just trying to live within their budget.

The way we combat inflation is to use actively managed accounts offered through our AXIOM program to help our clients. AXIOM has proven to be very effective in fighting inflation. Help a friend or family member by referring them to us so we can show them how our actively managed AXIOM program can help them navigate the trying times of inflation.

Active vs Passive Investment Strategies - Cody Cox

When it comes to investing, there are two broad strategies that can be used to achieve your investment goals. They are active or passive strategies. We believe that an active investment strategy provides a greater benefit to investors than a purely passive strategy.

With passive investing, your money will stay invested in a consistent manner according to what benchmark or index it is aligned with. On the other hand, an active strategy will leverage the expertise of skilled managers to make informed decisions about what securities to buy and sell and how to allocate holdings during different market conditions.

It is likely that the market will experience both ups and downs throughout the time you invest. Active managers can make adjustments to help limit losses during downturns but also increase allocations to securities that may add value. They do this by following their proven investment philosophy along with a defined buy and sell process. Managers will also use diversification and other tools to seek better performance within acceptable risk parameters.

We have been very satisfied with the active managers we use through the Axiom platform and our mutual fund families. Each manager is thoughtful about market volatility but is focused on providing results during all types of market conditions.

Total returns of the indices mentioned are provided by Morningstar, MSCI, S&P Dow Jones and SectorSPDR.com. 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.

RETIREMENT INSIGHTS

2021 Retirement Account Contributions

As we near the end of the year, take the time to see if you can contribute additional savings to your retirement. IRAs and Roth IRAs are excellent ways to supplement your retirement savings. Below are some details about each type of account. Always feel free to call us to discuss these options more and to clarify their details, 281-395-8300.

Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into their account(s). Distributions from traditional IRAs 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.

Within certain limits, individuals can make contributions to a Roth IRA with after-tax dollars. To qualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½.

In addition to contribution and distribution rules, there are limits on how much can be contributed each year to either IRA. In fact, these limits apply to any combination of IRAs; that is, workers cannot put more than $6,000 per year into their Roth and traditional IRAs combined. So, if a worker contributed $3,500 in a given year into a traditional IRA, contributions to a Roth IRA would be limited to $2,500 in that same year.

Individuals who reach age 50 or older by the end of the tax year can qualify for “catch-up” contributions. The combined limit for these is $7,000.

Both traditional and Roth IRAs can play a part in your retirement plans. And once you’ve figured out which will work better for you, only one task remains: open an account.

source: (1) Visit IRS.gov to learn more about the limits and rules surrounding IRAs. See your tax advisor. (2) Under the SECURE Act, in most circumstances, once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA).

Required Minimum Distributions

Required Minimum Distributions (RMDs) apply to the following types of retirement accounts:

  • Traditional IRAs
  • SEP IRAs
  • SIMPLE IRAs
  • 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • profit sharing plans
  • other work defined contribution plans

You must take your first RMD by April 1 of the year following the year in which you turn 72, regardless of whether you are still employed. If you are a business owner, please see your tax advisor for more information.

For each year after your required beginning date, you must withdraw your RMD by December 31.

For the first year following the year you reach age 70½ (age 72 if born after June 30, 1949), you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½ (or 72 if born after June 30, 1949)) and an additional withdrawal by December 31 (for the year following the year you turn 70½ (or 72 if born after June 30, 1949)). You can make your first withdrawal by December 31 of the year you turn 70½ (or 72 if born after June 30, 1949) instead of waiting until April 1 of the following year which would allow the distributions to be included in your income in separate tax years.

Now is the time to become aware of your RMD requirements on your retirement accounts and any inherited retirement accounts. If you are unsure if you are already set up to receive these payments please contact us so we can be sure you avoid tax penalties for missing RMDs.

How much do you need to take? If you have accounts with us, give us a call and we can help you with this information. You can use these worksheets to help you determine how much is required each year: https://www.irs.gov/retirement-plans/plan-participant-employee/required-minimum-distribution-worksheets

Source: IRS.gov

STAY INFORMED

TYPES OF STOCK MARKET ANALYSIS

There is no shortage of analysis for anyone interested in investing. In January 2021, a search for the term “stock market analysis” turned up over one billion results on Google and well over 70 million on Yahoo.

The majority of stock market analysis can be lumped into three broad groups: fundamental, technical, and sentimental. Here’s a close look at each:

Fundamental Analysis

The goal of fundamental analysis is to determine whether a company’s future value is accurately reflected in its current stock price.

Fundamental analysis attempts to estimate the value of a particular stock based on a variety of factors, such as the current finances of the company and the prevailing economic environment. Fundamental analysis also may include speaking with a company’s management team and assessing how the company’s products are received in the marketplace.

When a fundamental review is complete, the analyst may decide the stock is an attractive opportunity because the market has underestimated its future prospects. The analyst also may determine the stock to be a “hold” or a “sell” if the value is fully reflected in the price.

Technical Analysis

Technical analysts evaluate recent trading movements and trends to attempt to determine what’s next for a company’s stock price. Generally, technical analysts pay less attention to the fundamentals underlying the stock price.

Technical analysts rely on stock charts to make their assessment of a company’s stock price. For example, technicians may look for a support level and resistance level when assessing a stock’s next move. A support level is a price level at which the stock might find support and below which it may not fall. In contrast, a resistance level is a price at which the stock might find pressure and above which it may not rise.

Sentimental Analysis

Sentimental analysis attempts to measure the market in terms of the attitudes of investors. Sentimental analysis starts from the assumption that the majority of investors are wrong. In other words, that the stock market has the potential to disappoint when “masses of investors” believe prices are headed in a particular direction.

Sentiment analysts are often referred to as contrarians who look to invest against the majority view of the market. For example, if the majority of professional market watchers expect a stock price to trend higher, sentiment analysts may look for prices to disappoint the majority and trend lower.

Which approach is best? There is no clear answer to that question. But it’s important to remember three things: Past performance does not guarantee future results, actual results will vary, and the best approach is to create a portfolio based on your time horizon, risk tolerance, and goals.

Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

We post regularly on social media to give you practical tips and ideas.

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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.