Investment Report: What a Difference a Year Makes

By Chris Kamykowski, CFA | Moneta Investment Consultant

Twelve long months ago, the world faced a truly unique uncertainty while coming to grips with the onslaught of a global pandemic and sharp economic contraction arising from unprecedented worldwide lockdowns. Markets responded in-kind with a swift move downward, adding fuel to the fire of concerns for investors – although it took a backseat to real fears over mortality, infections, business survival and job prospects.

In our Q1 2020 Investment Report, we noted the lack of a crystal ball to inform us on how everything would play out: the speed, depth and severity of a large contraction in growth and how long it would take until a viable medical solution for COVID-19 was available. One of the few things we did know was that things would not go back to normal soon – at least over the near-to-medium term – and there would be ramifications long-term.

Sitting here more than 365 days later, much has changed on several fronts and we certainly have more answers than questions – although concerns remain. Things look brighter each day from multiple perspectives, so we wanted to briefly review just how far we have come:

COVID

Given the average time to develop a safe, effective vaccine typically takes 5-10 years, the world was right to be concerned about how long COVID’s impact would last. However, by using an accelerated timeline and coordination between governments and pharmaceutical companies, the first vaccines were ready, approved and distributed in less than a year. While distribution did have its logistical hiccups, more than 125 million Americans have received at least one dose and more than 78 million have been fully vaccinated as of April 15, 2021. Importantly, 80% of the most vulnerable people aged 65 years or older have received at least one dose. To be sure, we are not finished as younger age groups remain largely unvaccinated and variants of COVID are being reported in the population. However, progress in the fight against COVID has been immense the last few months, firmly putting us on a clear trajectory of progress.

Economy

Our recovery from an induced recession has been nothing short of miraculous if one thinks to the days of skyrocketing unemployment in the US, thousands of shuttered businesses (many permanently) and disruption to whole industries. However, here we sit in a distinct recovery period as the broader economy comes back online. Employment numbers are improving and trending higher with 1.6 million added payrolls in the first quarter of 2021. The ISM’s Purchasing Managers Index (PMI), which has generally been a reliable economic indicator, is showing strength and distinct momentum with services and manufacturing expanding to 20+ year highs as of March. Industries which were severely impacted, like travel and leisure, are seeing a pop in activity as hotels reach pre-pandemic occupancy levels and airports now process more and more air travelers. The consumer continues to be a stalwart, no doubt helped by the influx of stimulus checks, and housing is benefiting from historically low interest rates, high demand and low inventory.

Fiscal Stimulus

With so many people and businesses impacted by COVID lockdown policies during the last year, the US government embarked on unprecedented levels of fiscal stimulus alongside continued accommodative monetary policies to support workers and businesses. Whereas spending following the Great Recession of 2008-2009 topped out around $2 trillion, we have seen an injection of nearly $6 trillion in fiscal stimulus, which certainly fuels concerns over the levels of federal debt. Following the first quarter’s $1.9 trillion American Rescue Plan, the Biden administration is now seeking passage of an additional $2 trillion infrastructure package. While this will drive federal debt higher if passed and create long-term sustainability questions, our government is currently benefitting from a decline in the interest costs due to lower interest rates. At least in the near term, this should help mitigate the total costs of supporting the U.S. economy as we recover from the pandemic.

Interest Rates

After this past quarter’s steep rise in rates and steepening of the yield curve, the record lows of last year’s rate environment are a distant memory. While many quiver at the thought of higher rates – having been so conditioned to low rates the last 12 years – increases in interest rates in the early stages of a recovery are quite normal and should be welcomed, especially for savers. It speaks to confidence in the economy, an improving outlook and reduced reliance on the Fed’s need for extraordinary accommodative monetary policy. However, with the increased fiscal spending, economic growth momentum and higher federal debt issuance expected, markets have been suggesting the Fed may have to raise rates sooner than the Fed has communicated: one rate hike in 2022 and two in 2023. Part of this disconnect is due to the market’s concern over inflation. Some argue the immense amount of fiscal and monetary policy stimulus will lead to an overheated economy and inflation while others believe a pick up in inflation will be short lived–or, in the words of the Federal Reserve, “transitory.”

US Equity Markets

Fears over the outcome for equity markets should have been mitigated by the history of market returns following the lows of a past recession. Since 1974, the S&P 500 has typically recovered strongly following market lows of a recession with the last six periods averaging a 47% return one year later. The most recent market recovery was unique in both its speed and strength as the S&P 500 rose nearly 74% since March 23, 2020. While US growth stocks took the lead at the outset of the market recovery as investors paid for the relative certainty of future earnings, value stocks made a robust rebound and assumed market leadership, a theme that continued in the first quarter of 2021. As is typical in the early stages of a recovery, cyclicals (energy, financials, industrials) are benefiting from the turn in their expected profit cycle and the market is pricing in earnings momentum, a far cry from 2020. To highlight the extent of the market leadership change, relative to previous first quarters’ performance, value outperformed growth in the first quarter of 2021 by its widest margin since 2001 (+11.3% vs 15.0%, respectively).

Things are looking up in 2021 as the positive trends and momentum in the economy and markets suggest a welcome change from a year ago. Getting back to “normal” appears to be in the future, although we will likely incur the typical volatility markets throw at investors in any given year. In addition, it would be naïve to think there are no concerns still lurking, such as paying for all the stimulus, the impact on the tax landscape as fiscal liabilities pile up, the Fed’s and market’s reaction to unexpected inflation and pockets of frothy valuations. Still, while unknowns exist, what is known is timing market moves has proven incredibly difficult for wealth creation and preservation. Staying disciplined and maintaining diversified portfolio aligned with one’s return objectives and risk tolerances has proven to be the best course of action for most.

US Economic Update

• 916,000 jobs were added in March, which was the best monthly gain since August 2020. Despite the progress, total nonfarm payrolls remain more than 8 million short of pre-pandemic levels.

• The ISM Services survey hit an all-time high for the series dating back to 1997 as it rebounded off a drop in February. Manufacturing grew in March, as the Manufacturing PMI registered 64.7, 3.9 points higher. This is the highest reading since December 1983 (69.9).

• The housing market has been a foundation of support for the recovery, though, high housing prices and rising mortgage rates have slowed its momentum.

Government Spending

• Enormous amounts of fiscal stimulus spending due to the pandemic has driven US debt-to-GDP levels to all-time highs. While federal debt is higher, the U.S. government is benefitting from a decline in the interest costs due to lower interest rates.

• Federal budget deficits have widened substantially over the last year, and the trend looks to continue. Further spending packages are possible as President Biden seeks to garner support for the passage of a multi-trillion infrastructure bill this year.

Market Performance

• The 12-month equity market recovery from the March 2020 low was the best in both speed and strength relative to the recessions since 1974. As the U.S. experienced recessions in the modern era, fiscal and monetary policy adapted by implementing more aggressive responses to lessen the short-term impact of economic contractions. However, time will tell what the long-term consequences to this short-term relief will be.
• In response to the 2009 recession, the U.S. experienced nearly $2 trillion in economic relief. In response to the 2020 recession, we are nearly triple that amount, which certainly served as a catalyst for a swifter market recovery.

Market Performance

• From left-to-right, the chart above is in order from value-oriented sectors to growth-oriented sectors. After four calendar years of growth outperforming value, we are witnessing a leadership change with value sectors outperforming growth sectors. Energy and financials are leading the charge while technology and consumer discretionary begin to cool-off after an impressive 2020 year of performance.
• This is aligned with expectations as value tends to outperform growth during a recovery and rising interest rate environment. This is because:
  • As market fear and risk decline, investors tend to look for investments that were disproportionately impacted during the recession, which are usually stocks with low price-to-earnings ratios.
  • As interest rates and inflation rises, the value of a dollar today becomes relatively more valuable than a dollar in the future. Therefore, companies with more earnings-per-dollar today tend to outperform companies that are expected to grow into their earnings.

Market Performance

©2021, Moneta Group Investment Advisors, LLC. These materials have been prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified. Past performance is not indicative of future returns. You cannot invest directly in an index. These materials do not constitute an offer or recommendation to buy or sell securities, and do not take into consideration your circumstances, financial or otherwise. You should consult with an appropriately credentialed investment professional before making any investment decision.

The post Investment Report: What a Difference a Year Makes first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/cwcj-investment-report-what-a-difference-a-year-makes-2/

Investment Report: What a Difference a Year Makes

By Chris Kamykowski, CFA | Moneta Investment Consultant

Twelve long months ago, the world faced a truly unique uncertainty while coming to grips with the onslaught of a global pandemic and sharp economic contraction arising from unprecedented worldwide lockdowns. Markets responded in-kind with a swift move downward, adding fuel to the fire of concerns for investors – although it took a backseat to real fears over mortality, infections, business survival and job prospects.

In our Q1 2020 Investment Report, we noted the lack of a crystal ball to inform us on how everything would play out: the speed, depth and severity of a large contraction in growth and how long it would take until a viable medical solution for COVID-19 was available. One of the few things we did know was that things would not go back to normal soon – at least over the near-to-medium term – and there would be ramifications long-term.

Sitting here more than 365 days later, much has changed on several fronts and we certainly have more answers than questions – although concerns remain. Things look brighter each day from multiple perspectives, so we wanted to briefly review just how far we have come:

COVID

Given the average time to develop a safe, effective vaccine typically takes 5-10 years, the world was right to be concerned about how long COVID’s impact would last. However, by using an accelerated timeline and coordination between governments and pharmaceutical companies, the first vaccines were ready, approved and distributed in less than a year. While distribution did have its logistical hiccups, more than 125 million Americans have received at least one dose and more than 78 million have been fully vaccinated as of April 15, 2021. Importantly, 80% of the most vulnerable people aged 65 years or older have received at least one dose. To be sure, we are not finished as younger age groups remain largely unvaccinated and variants of COVID are being reported in the population. However, progress in the fight against COVID has been immense the last few months, firmly putting us on a clear trajectory of progress.

Economy

Our recovery from an induced recession has been nothing short of miraculous if one thinks to the days of skyrocketing unemployment in the US, thousands of shuttered businesses (many permanently) and disruption to whole industries. However, here we sit in a distinct recovery period as the broader economy comes back online. Employment numbers are improving and trending higher with 1.6 million added payrolls in the first quarter of 2021. The ISM’s Purchasing Managers Index (PMI), which has generally been a reliable economic indicator, is showing strength and distinct momentum with services and manufacturing expanding to 20+ year highs as of March. Industries which were severely impacted, like travel and leisure, are seeing a pop in activity as hotels reach pre-pandemic occupancy levels and airports now process more and more air travelers. The consumer continues to be a stalwart, no doubt helped by the influx of stimulus checks, and housing is benefiting from historically low interest rates, high demand and low inventory.

Fiscal Stimulus

With so many people and businesses impacted by COVID lockdown policies during the last year, the US government embarked on unprecedented levels of fiscal stimulus alongside continued accommodative monetary policies to support workers and businesses. Whereas spending following the Great Recession of 2008-2009 topped out around $2 trillion, we have seen an injection of nearly $6 trillion in fiscal stimulus, which certainly fuels concerns over the levels of federal debt. Following the first quarter’s $1.9 trillion American Rescue Plan, the Biden administration is now seeking passage of an additional $2 trillion infrastructure package. While this will drive federal debt higher if passed and create long-term sustainability questions, our government is currently benefitting from a decline in the interest costs due to lower interest rates. At least in the near term, this should help mitigate the total costs of supporting the U.S. economy as we recover from the pandemic.

Interest Rates

After this past quarter’s steep rise in rates and steepening of the yield curve, the record lows of last year’s rate environment are a distant memory. While many quiver at the thought of higher rates – having been so conditioned to low rates the last 12 years – increases in interest rates in the early stages of a recovery are quite normal and should be welcomed, especially for savers. It speaks to confidence in the economy, an improving outlook and reduced reliance on the Fed’s need for extraordinary accommodative monetary policy. However, with the increased fiscal spending, economic growth momentum and higher federal debt issuance expected, markets have been suggesting the Fed may have to raise rates sooner than the Fed has communicated: one rate hike in 2022 and two in 2023. Part of this disconnect is due to the market’s concern over inflation. Some argue the immense amount of fiscal and monetary policy stimulus will lead to an overheated economy and inflation while others believe a pick up in inflation will be short lived–or, in the words of the Federal Reserve, “transitory.”

US Equity Markets

Fears over the outcome for equity markets should have been mitigated by the history of market returns following the lows of a past recession. Since 1974, the S&P 500 has typically recovered strongly following market lows of a recession with the last six periods averaging a 47% return one year later. The most recent market recovery was unique in both its speed and strength as the S&P 500 rose nearly 74% since March 23, 2020. While US growth stocks took the lead at the outset of the market recovery as investors paid for the relative certainty of future earnings, value stocks made a robust rebound and assumed market leadership, a theme that continued in the first quarter of 2021. As is typical in the early stages of a recovery, cyclicals (energy, financials, industrials) are benefiting from the turn in their expected profit cycle and the market is pricing in earnings momentum, a far cry from 2020. To highlight the extent of the market leadership change, relative to previous first quarters’ performance, value outperformed growth in the first quarter of 2021 by its widest margin since 2001 (+11.3% vs 15.0%, respectively).

Things are looking up in 2021 as the positive trends and momentum in the economy and markets suggest a welcome change from a year ago. Getting back to “normal” appears to be in the future, although we will likely incur the typical volatility markets throw at investors in any given year. In addition, it would be naïve to think there are no concerns still lurking, such as paying for all the stimulus, the impact on the tax landscape as fiscal liabilities pile up, the Fed’s and market’s reaction to unexpected inflation and pockets of frothy valuations. Still, while unknowns exist, what is known is timing market moves has proven incredibly difficult for wealth creation and preservation. Staying disciplined and maintaining diversified portfolio aligned with one’s return objectives and risk tolerances has proven to be the best course of action for most.

US Economic Update

• 916,000 jobs were added in March, which was the best monthly gain since August 2020. Despite the progress, total nonfarm payrolls remain more than 8 million short of pre-pandemic levels.

• The ISM Services survey hit an all-time high for the series dating back to 1997 as it rebounded off a drop in February. Manufacturing grew in March, as the Manufacturing PMI registered 64.7, 3.9 points higher. This is the highest reading since December 1983 (69.9).

• The housing market has been a foundation of support for the recovery, though, high housing prices and rising mortgage rates have slowed its momentum.

Government Spending

• Enormous amounts of fiscal stimulus spending due to the pandemic has driven US debt-to-GDP levels to all-time highs. While federal debt is higher, the U.S. government is benefitting from a decline in the interest costs due to lower interest rates.

• Federal budget deficits have widened substantially over the last year, and the trend looks to continue. Further spending packages are possible as President Biden seeks to garner support for the passage of a multi-trillion infrastructure bill this year.

Market Performance

• The 12-month equity market recovery from the March 2020 low was the best in both speed and strength relative to the recessions since 1974. As the U.S. experienced recessions in the modern era, fiscal and monetary policy adapted by implementing more aggressive responses to lessen the short-term impact of economic contractions. However, time will tell what the long-term consequences to this short-term relief will be.
• In response to the 2009 recession, the U.S. experienced nearly $2 trillion in economic relief. In response to the 2020 recession, we are nearly triple that amount, which certainly served as a catalyst for a swifter market recovery.

Market Performance

• From left-to-right, the chart above is in order from value-oriented sectors to growth-oriented sectors. After four calendar years of growth outperforming value, we are witnessing a leadership change with value sectors outperforming growth sectors. Energy and financials are leading the charge while technology and consumer discretionary begin to cool-off after an impressive 2020 year of performance.
• This is aligned with expectations as value tends to outperform growth during a recovery and rising interest rate environment. This is because:
  • As market fear and risk decline, investors tend to look for investments that were disproportionately impacted during the recession, which are usually stocks with low price-to-earnings ratios.
  • As interest rates and inflation rises, the value of a dollar today becomes relatively more valuable than a dollar in the future. Therefore, companies with more earnings-per-dollar today tend to outperform companies that are expected to grow into their earnings.

Market Performance

©2021, Moneta Group Investment Advisors, LLC. These materials have been prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified. Past performance is not indicative of future returns. You cannot invest directly in an index. These materials do not constitute an offer or recommendation to buy or sell securities, and do not take into consideration your circumstances, financial or otherwise. You should consult with an appropriately credentialed investment professional before making any investment decision.

The post Investment Report: What a Difference a Year Makes first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/investment-report-what-a-difference-a-year-makes/

On-Demand Webinar 2021 TAXES: Changes on the Horizon

The post On-Demand Webinar 2021 TAXES: Changes on the Horizon first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/on-demand-webinar-2021-taxes-changes-on-the-horizon/

Spring Edition

 

 

 

Something to Look Forward To…

Tasha Borglum, Advisor

A client once told me that she largely credits one thing to keeping her energized in tough times and even just in the daily grind that can be life: she always has something to look forward to. If she finds herself without something to look forward to, she intentionally creates something. For her, that something is a vacation. She always has a vacation or trip to her beloved second home planned because it is fun to think about and brings her happiness even on her toughest days. I don’t know that she realizes how much her words, shared over cocktails one afternoon, impacted my outlook. I find myself not only inspired to do the same thing in my own life, but encouraging others to do the same thing as well.

My definition of “something to look forward to” may be different than yours. Your definition might be different than your spouse’s or your children’s. But as we hit the one-year anniversary of being in this pandemic, with thinning patience and increasing fatigue, I think it’s more important than ever to find your own definition and chart your path forward. Vaccines are getting distributed. Case numbers, at least as of the time of this writing, have improved dramatically. The stock market, albeit with some recent volatility, has recovered from the March 23, 2020 low and is near a record high. Things are getting better. There is so much to be positive about and when you add planning a vacation, hugging your grandchild for the first time in 12+ months because you are finally vaccinated and comfortable, gathering with friends for a barbecue or your first long weekend getaway without your children in way too long…the good energy has no upper limit.

The sun is shining and the days are getting increasingly brighter. I personally am looking forward to a long weekend trip to Florida in a few weeks, planning my son’s outdoor third birthday party and seeing my teammates in person for the first time in a long time as spring and warmer weather arrive. I look forward not only to these things, but to hearing about your “something to look forward to” the next time we talk or see each other. I cannot wait for the conversation!

 

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Ask a Professional

Mike Vredenburgh, Advisor

American Rescue Plan Act (ARPA) & Extension of Tax Deadlines

On March 11, 2021 President Biden signed the $1.9T American Rescue Plan Act (ARPA) into law. Another round of stimulus payments was included for eligible recipients in addition to a few significant tax provisions:

Expanded Child Tax Credit / Child and Dependent Care Credit

The child tax credit increases the age limit from 16 to 17. It used to be $2,000, but for 2021 only, the credit increases to $3,000 ($3,600 for a child under age 6) and is fully refundable compared to just $1,400 under current law. The excess credit above the $2,000 “normal credit” begins to phase out at $75,000 of adjusted gross income (AGI) for a single taxpayer, $150,000 for a married couple filing jointly. The “normal credit” continues to phase out at $200,000 for a single taxpayer, $400,000 for a married couple filing jointly.

The child and dependent care tax credit increases from a 2020 high of $2,100 for two eligible children to as much as $8,000 in 2021 and is also fully refundable.

Increase for Dependent Care Assistance Programs

ARPA increases the allowable contribution amounts to Dependent Care FSA Accounts for 2021 only from $5,000 to $10,500 for a married couple filing jointly, $2,500 to $5,250 for married couples filing separately. It will be up to the employer if they want to modify their plan to coincide with this temporary increase, so please reach out to your HR department to urge them to participate.

Extension of Tax Deadlines

On March 17, 2021 the IRS announced that individuals have until May 17 to file their 2020 form 1040 tax returns and make 2020 tax year federal income tax payments. This also postpones to May 17 the contribution deadlines to IRAs, Roth IRAs, and HSAs.

As always, if you have any questions about this or anything else, please reach out to the Breckenridge Team.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

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Team Member Spotlight

Jeff Tank, Client Service Manager

Well, the spotlight has come around to me once again. With mixed feelings, I’m here to say this will be my last writing for the Breckenridge Team newsletter.  When I started at Moneta in 2017, I knew this would likely be my last professional job.  In late January, my wife and I announced that we would both be retiring this year.  My wife, Nancy, is retiring in early April from Delta Dental of Missouri after almost 23 years.  As for me, I will be leaving Moneta in early July.

I am grateful for the opportunity that Dave and Tasha gave me four years ago. I will most miss interacting with and helping my clients.  I will miss my teammates, too, of course. Working from home does make it a bit easier to say goodbye. Unfortunately for them, I still plan to continue to bother them once I’m retired.

We are looking forward to traveling once things are safer out there, including a trip to celebrate our 30th wedding anniversary, which is this June.  We will likely move out of the St. Louis area eventually, but will enjoy St. Louis as a retired couple for now.

Our daughter, Caroline, graduates in May with her Masters in Industrial Engineering.  We are anxious to see where she ends up for her first real job.

I wish you and your families the very best in the years ahead with continued success, health, and happiness.

 

 

The post Spring Edition first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/spring-edition-2/

Ask the CFP: What are Master Limited Partnerships?

Hello everyone and welcome to this month’s Ask the CFP segment. This month’s question is, “what are Master Limited Partnerships?” MLPs are a special type of business entity created by Congress in 1980s. They’re typically used with real estate or energy investments. We’ll focus on energy-related MLP funds today since many of our clients own them. More specifically, we’ll focus on what we call mid-stream energy.

Mid-stream MLPs focus on the transportation of natural resources, not exploration or production. This may resemble the toll-road business model where revenue is generated as resources are transported around the country. Since a mid-stream MLP fund may focus the transportation of energy, it may be less dependent on the price of the commodity it’s transporting.

One distinct feature of MLP funds is quarterly cash distributions. Many investors like the income stream offered by these investments, especially during low interest rate environments. Although not guaranteed, these income streams have been fairly stable as our country continues to demand oil and natural gas for industrial use, residential use and generating electricity. In fact, according to the US Energy Information Administration, over 100 coal-fired power plants have been replaced by natural gas since 2011¹.

Another unique feature of MLPs is their tax structure. Some are organized as limited partnerships while others are limited liability companies. Because of this, some MLPs issue a K-1 tax form for use when completing a tax return. K-1 forms can make tax returns more complicated, so some people elect to own MLPs inside a mutual fund that’s organized as a corporation. This is why some MLP mutual funds issue 1099 tax forms instead of K-1s.

Lastly, another unique feature of mid-stream MLPs is the depreciation that may occur on the assets they own. For example, if an MLP upgrades a pipeline system, it may be able to depreciate that asset using various accounting methods. This depreciation is generally passed on to investors and helps offset taxable distributions from the MLP. Keep in mind that the cost basis or the original price paid for the MLP fund may be reduced as this occurs, which means more capital gains may occur when it’s sold one day. This tax treatment is another unique part of MLP investing.

Overall, MLP funds may be volatile at times due to the energy markets, but they offer a unique way to add diversification and income to a portfolio. If you have a question about this topic or have a question for next month’s video, please send it to dtroyer@monetagroup.com. Thanks for watching and we’ll see you next month.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Please speak with a qualified tax or legal professional before making any changes to your personal situation.

¹Source: https://www.eia.gov/todayinenergy/detail.php?id=44636

The post Ask the CFP: What are Master Limited Partnerships? first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/ask-the-cfp-what-are-master-limited-partnerships/

How Do You Want to Give Back in 2021?

As one does in a new year, we reflect on the prior year. What we liked, what we disliked, what we are set out to change to make the next 12 months better.

With the book closed on 2020, I think it’s clear what made us all hit the dislike button. The pandemic jolted everyone across the world in the most unwelcome way.

Today, instead of focusing on all the negative, because, after all, it is a new year and I’ve resoluted to be more positive, I thought it would be fitting to spend time discussing giving back.

As you start to think through how or perhaps how much you want to give to those organizations that are important to you, I’d like to share a few planning strategies that could help maximize your gifting.

First, for folks with mutual funds or stocks that have nicely appreciated over the years, making a gift in the form of a security is one method to lock in the value of the investment without having to pay tax on any of the gain.

Another option, for folks over 70 1/2, utilizing your individual retirement account to make Qualified Charitable Distributions. These distributions are exempt from being reported as taxable income on your return  as long as they are made directly to a qualifying charity. This is a great strategy for utilizing pre tax dollars to fund your gifting.

Lastly, a concept that has gained attention in recent years, “charitable bunching.” 2018 tax law changes eliminated or restricted certain itemized deductions, while also increasing the amount of the standard deduction.  It’s estimated that nearly 90% of taxpayers are now taking the standard deduction versus itemizing. As the name suggests, this strategy is accomplished by “bunching” your gifts in one year allowing you to take advantage of a larger itemized deduction amount, and then taking the standard deduction in subsequent years. Rinse. Repeat. When applied thoughtfully, this results in additional deductions being harvested along the way.

Not all planning is one size fits all. It’s important to consult your financial and tax advisor to ensure the most valuable strategies are being incorporated into your specific plan.

If you have more financial questions, don’t hesitate to ask your Family CFO.  We do more so you can too.

The opinions voiced in this material are for general information only and are not intended to provide specific advice for any individual. Examples contained herein are for illustrative purposes only based on generic assumptions.  This is not an offer to buy or sell securities, nor does it represent a specific recommendation.  Please speak with a qualified tax, legal or investment professional before making any changes to your personal situation.

The post How Do You Want to Give Back in 2021? first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/how-do-you-want-to-give-back-in-2021/

Moneta Charitable Foundation Partners With Local Nonprofits In COVID Relief Plan

The global pandemic left more than its fair share of scars in 2020, but local communities are healing together in 2021.

People and organizations rallying to help each other in times of need stands as one of the major positive results from the test COVID gave us.

Moneta Charitable Foundation (MCF) is proud to aid that effort by supporting the following three organizations with its annual Partnership Grants and new COVID relief plan.

KidSmart

When schools closed down in March of 2020, KidSmart quickly surveyed teachers to create a plan that would ensure that all 72,500 of the children it serve were equipped for at-home learning. KidSmart rapidly innovated new distribution methods that would meet the extraordinary need, while also adhering to safety guidelines.

KidSmart almost immediately launched a new Drive-Thru program. Typically, March through May are months when distribution is low as the school year wraps up and KidSmart prepares for summer fundraising. But in 2020, in 10 weeks in March through May, KidSmart distributed $2.2 million in free school supplies. Teachers drive their cars up to the KidSmart warehouse where staff members or volunteers safely load up their trunks with brand new school supplies for their classrooms. Teachers then bring those supplies back to their classrooms, or distribute them directly to students’ homes––or wherever students may be, including homeless shelters.

Now, with students learning both in the classroom and at-home, and with strict sanitation measures in place, the need for KidSmart supplies has doubled. Not only is KidSmart accounting for double the amount of classrooms –– the ones that are now happening in students’ homes –– to equip, but students are no longer allowed to share supplies in the classrooms. KidSmart’s goal is to distribute another $2 million in free school supplies in the back-to-school season, and $6 million more throughout the rest of the school year. This year, supplies also include masks, hand sanitizer, and other personal protective equipment (PPE).

MCF is donating one of its two annual $25,000 Partnership Grants to provide a Back-To-School Bash for a KidSmart-partnered school, equipping all of that school’s students with full backpacks of supplies needed to return to school in August of 2021. Moneta employees will also give volunteer hours by helping distribute those backpacks and sorting supplies in prep for drive thru teacher distribution events.

Wings of Hope

Wings of Hope flies approximately 200 Medical Relief & Air Transport (MAT) missions each year, providing medical air transport services, free of charge, to individuals who need specialized medical care that is not available to them locally. Using aircraft specially outfitted with stretchers to accommodate fragile and non-ambulatory patients, the organization flies individuals to hospitals and treatment centers in 26 states within a 600-mile radius of its St. Louis headquarters.

A majority of MAT passengers are children with congenital disorders and rare or life-threatening health conditions. The need for orthopedic specialists is especially common because of a condition doctors call “clubfoot” seen in approximately one out of every 1,000 babies.

Once Wings of Hope begins transporting a patient, the organization commits to flying them to post-op care and treatment for as long as it is needed. The MAT Program relieves these individuals and their families of the stresses and financial burdens of arranging and paying for travel.

But Wings of Hope is a global humanitarian charity with a scope that is much broader than this single program. The nonprofit uses the power of aviation to help the world’s poorest citizens access the basic resources essential for human dignity: health, education, economic opportunity and food security.

All of this is supported by approximately 300 highly skilled and engaged volunteers. The group includes 20 MAT pilots, 80 mechanics and all the accountants, flight coordinators and administrative support staff – even each member of the volunteer recruitment and retention team itself.

MCF is donating one of its two annual $25,000 Partnership Grants to support the Wings of Hope MAT program. Volunteer support from Moneta employees will be directed at helping to host a virtual gala in place of the MAT program’s annual in-person fundraiser event that could not be held this year because of the pandemic. Moneta employees will also help host the “Taste of Hope” drive-through event featuring food and beverage tasting from local restaurants as a fundraiser for Wings of Hope’s global partners working to change and save lives through the power of aviation.

PBS: Teaching in Room 9

A majority of schools transitioned to virtual learning in 2020 and are struggling to engage early learners. As schools resume some in-person learning, access to educational resources in the classroom and at home become all the more important.

The digital divide poses tremendous challenges for schools serving under-resourced families. Nine PBS reaches these children, their families and their educators while helping the regional effort to bridge this digital divide.

Teaching in Room 9 began as a response to calls from education leaders and health experts to meet the new learning needs of young children during the pandemic. Teaching in Room 9 broadcasts previously recorded 30-mintue lessons from area teachers throughout the region. Lessons in literacy, math, science and related arts are available free in all households from 11:30 a.m. to 1:30 p.m., Monday through Friday for students in PreK-3rd grade.

As an extension of its COVID relief plan, Moneta is donating a $20,000 grant to help Nine PBS continue providing early education programs—on the air, in the classroom, and in the home. Moneta employees will also volunteer in support of on-air pledge nights and in-person events when they are safe to resume.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. Moneta Group Investment Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC.  Registration as an investment advisor does not imply a certain level of skill or training. Moneta is a service mark owned by Moneta Group, LLC.

The post Moneta Charitable Foundation Partners With Local Nonprofits In COVID Relief Plan first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/moneta-charitable-foundation-partners-with-local-nonprofits-in-covid-relief-plan/

One Whole Year

Our team marked a significant milestone in March. It has now been a year that we have been working from home. We want to recognize this anniversary by thanking each of you for your patience and understanding as we pivoted those first few weeks and throughout this last year to our work from home setups with Zoom calls, digital forms, and all the learning curves that came with it.

With Julie living in Colorado, Margaret working from home alongside her three school aged kiddos, Cecelia adjusting to law school online, and Lisa sharing coworking space with her husband, we have all had to adjust and grow in this new “normal”, as we know all of you have as well. We even hired Steve virtually. With a new baby girl at home, he is in the office more often.

We feel so grateful for your support and adaptation over the past year, and we truly cannot wait to see you again in person. We miss you and look forward to hearing all your latest updates and exchanging pandemic stories. While we still have our home office setups, we hope to begin transitioning to in-person reviews this fall.

Until then, we wish you continued good health and good spirits as we move towards “normal” soon!

Cheers from our home offices!

The post One Whole Year first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/one-whole-year/

Moneta Named Among Nation’s Top Defined Contribution Advisor Multi-Office Firms

Moneta’s retirement plan consulting services continue to be ranked among the industry’s best.

For the second year in a row, the National Association of Plan Advisors (NAPA) recognized Moneta on its list of the nation’s Top DC Advisors. Moneta debuted on NAPA’s list of Top DC Advisor Teams for 2019. For the 2020 awards published in March of 2021, Moneta moved to NAPA’s list of Top DC Advisor Multi-Office Firms as a result of its growing national footprint with expansions into Denver, Kansas City and the Greater Boston Area.

Moneta adds these accolades to its run of four consecutive years being named among PlanAdviser Magazine’s Top 100 Retirement Plan Advisers from 2017-2020.

The firm is also fresh off of winning five Top Workplaces awards and being honored among the nation’s best places to work for financial advisors.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. Moneta Group Investment Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC.  Registration as an investment advisor does not imply a certain level of skill or training. Moneta is a service mark owned by Moneta Group, LLC.

The post Moneta Named Among Nation’s Top Defined Contribution Advisor Multi-Office Firms first appeared on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/2021/04/07/moneta-named-among-nations-top-defined-contribution-advisor-multi-office-firms/