The Cox Connection

Vol 3 Issue 4 ||October 2020

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Market Performance as of 9/30/20

  • S&P 500 TR: QTD 8.93% and YTD 5.57%
  • Dow Jones Industrial Average TR: QTD 8.22% and YTD -0.91%
  • MSCI EAFE (International Stocks): QTD 4.80% and YTD -7.09%
  • MSCI Emerging Markets: QTD 9.56% and YTD -1.16%
  • Bloomberg Barclays US Aggregate Bond: QTD 0.62% and YTD 6.79%
  • Bloomberg Barclays Global Aggregate Bond: QTD 0.73% and YTD 4.65%

The capital markets continue their recovery from the Corona Virus Pandemic. We have seen positive returns from the equity markets during the third quarter of the year and the S&P 500 has managed to climb 5.57% year-to-date through September 30, 2020. The international markets still have some ground to make up. The United Kingdom drives the performance for many of our international benchmarks. They suffered a greater economic shock than most developed markets with its GDP down nearly 22% for the first half of the year compared to the U.S. down 10% during the same period.(1) Bond markets are helping investors balance their portfolios attractively for 2020 but has offered a below 1% return for the third quarter. The Fed continues to let us know that we can expect low interest rates for the foreseeable future.

"When we look to the near future, we want to remind you that the market has proven resilient over time. Even during extreme times like the assassination of John F. Kennedy on November 22, 1963. The market closed early that day and dropped 2.8%, but the market recovered all the losses in just two days. Investors realized this was an emotional event and not an economic event.
Our current economy suffered some losses following the announcement of a global pandemic, but even as the pandemic worsened the stock market rebounded. Now the stock market is approaching all time highs. If there is one lesson several successful investors have learned it is that you cannot time the market. Most rebounds happen by surprise and how will you know when it is time to get back in if you move to cash in tough times? Stay invested in quality investments for the long-term, that is the key to successful investing."
Don Cox

Source: 1. https://www.blackrock.com/us/individual/literature/market-commentary/weekly-investment-commentary-en-us-20201012-uk-case-study-virus-dynamics.pdf. 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.

2020 presidential election

"Historically speaking, there has never been a time when stocks haven't trended higher after a president took office, as seen in the above graph.
As we near the 2020 presidential election, many investors and voters are pondering who will win this election and how that will impact the markets. While it is easy to get caught up in political narratives, investors should be wise and stay focused on their investment goals and objectives. The United States has withstood many events before including wars, economic collapse, and even prior pandemics. Again, the economy has proven resilient and the country has always moved forward.
While you will probably read or hear about certain predictions of how the market will react based on who wins, keep in mind that markets can react in surprising ways. Don mentioned the Kennedy assassination but also we had the year 2016, when markets climbed following the election of Donald Trump going against predictions of market declines in the event of a Trump victory. A look back at our country’s history will show you that the connection between which party wins the presidency and the economic or market outcomes is much more complex than the predictors of the market take into account.
It is important to remember that the balance of power does not lie in the hands of one party or one person, but rather in a system of distributed power that allows politicians to be checked. The democratic and political processes have provided the framework for both the capital markets and U.S. economy to become the largest in the world. It is important that investors of all ages avoid allowing the news headlines to knock them off course this year. Just like in any election year or any other year, maintaining a long-term horizon, a disciplined investment approach, and a sensible rebalancing plan continues to be a sound investment strategy.
We believe in and are constantly reviewing our client's portfolios and the investment managers we use. If you feel like your risk tolerance has changed from your current portfolio for the long-term please let us know and we can work with you to update your portfolio. We do not believe in market timing and you will not see us make a recommendation to move an entire portfolio to cash. We believe in what we do and the strategies we have in place. We are hear to navigate this time with you and are always here to answer any questions or concerns you may have."
Cody Cox


Do you have an old 401(k) at a previous employer?

Step 1:

There is no one size fits all answer for what to do with it. Your first step is to know your current plan's investment options and how much they are costing you. You should have a variety of fund options not just in quantity but also in style and risk level. If you are only offered one fund choice for large cap stock for example, that would be considered a limited option. Plans must be sure they are giving participants a variety of choices so that you can build a portfolio best for you in the long term.

To review costs, you can ask your employer for a copy of the fee disclosure they are required to have for the plan. This will list any mutual fund fees you are paying in the form of an expense ratio and also any fees the participant is responsible for.

Step 2:

After you have determined all the costs associated with your old 401(k) and if you may be limited to investment options you can begin to compare them to other options.

There is a lot of information online but it is often clear as mud. To be sure you understand and know any hidden fees it is a good idea to talk with us. We can explain how a Rollover IRA (Individual Retirement Account) might be appropriate for you or if you have a new employer we can help you review that plan offering as well. An IRA may be able to offer more investment choices with the same or lower costs as your old plan. We can also offer professional management with asset allocation and investment selection advice.

There are two IRA options to consider, a regular Rollover IRA and a Roth IRA conversion from a traditional 401(k) Plan. A rollover from a Roth 401(k) Plan would rollover into a Roth IRA. There are different tax implications with each option, so we recommend getting the details of those from a professional.

Conclude step 2 by deciding if you are going to keep your old 401k, roll it to an IRA, or move it to your new employer plan.

Step 3:

Now, it's time to gather the forms you'll need.

If you decide to keep your 401(k) at your old employer you'll need to contact them to be sure that you meet any account size minimums they have. Some plans will only allow old employee accounts to stay if they have a minimum account value.

If you have decided to move your 401(k) you will need to contact your previous employer to get the form you need to request a transfer or a rollover. Also, be aware of any outstanding loans on your account. Those will need to be paid before a rollover otherwise they are treated as an early distribution with tax penalties.

Next, contact your new account provider, either Cox Global or your new employer plan contact, to complete any paperwork to open your new account. Please ask questions. Go slow and be sure you understand the selections you are making on your forms and any fees you are agreeing to.

We are here to help you navigate your job transition. Please call us if you have any questions or would like to review your situation, 281-395-8300.

With the number of unemployment claims still rising we open ourselves up to the potential of fraud.

  1. Please do NOT give your personal information out to anyone who calls you.
  2. If you begin to receive letters about your unemployment claim from the State Work Force Commission but you did not file one, you should report the claim to the State Work Force Fraud department.
  3. Read more about Fraud via this Texas Workforce Commission here: https://www.twc.texas.gov/jobseekers/unemployment-benefits-fraud#fraudDetection

Unfortunately, most of our personal information is available out there somewhere. Please stay vigilant about information you receive in the mail. Do not click on links or open attachments within emails that are not familiar to you or that seem surprising from someone or entity you may know.

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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. "Does Your Portfolio Fit Your Retirement Lifestyle" was 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.