IRS Clarifies COVID-19 Relief Measures for Retirement Savers

Retirees who took RMDs in 2020 have until August 31, 2020, to roll the money back into a qualified account. This rollover will not affect the one-rollover-per-year rule.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 ushered in several measures designed to help IRA and retirement plan account holders cope with financial fallout from the virus. The rules were welcome relief to many people, but left questions about the details unanswered. In late June, the IRS released Notices 2020-50 and 2020-51, which shed light on these outstanding issues.

Required minimum distributions (RMDs)

One CARES Act measure suspends 2020 RMDs from defined contribution plans and IRAs. Account holders who prefer to forgo RMDs from their accounts, or to withdraw a lower amount than required, may do so. The waiver also applies to account holders who turned 70½ in 2019 and would have had to take their first RMD by April 1, 2020, as well as beneficiaries of inherited retirement accounts.

One of the questions left unanswered by the legislation was: “What if an account holder took an RMD in 2020 before passage of the CARES Act and missed the 60-day window to roll the money back into a qualified account?”

In April, IRS Notice 2020-23 extended the 60-day rollover rule for those who took a distribution on or after February 1, 2020, allowing participants to roll their money back into an eligible retirement account by July 15, 2020. This seemingly left account owners who had taken RMDs in January without recourse. However, IRS Notice 2020-51 rectified the situation by stating that all 2020 RMDs — even those received as early as January 1 — may be rolled back into a qualified account by August 31, 2020. Moreover, such a rollover would not be subject to the one-rollover-per-year rule.

This ability to undo a 2020 RMD also applies to beneficiaries who would otherwise be ineligible to conduct a rollover. (However, in their case, the money must be rolled back into the original account.)

This provision does not apply to defined benefit plans.

Coronavirus withdrawals and loans

Another measure in the CARES Act allows qualified IRA and retirement plan account holders affected by the virus to withdraw up to $100,000 of their vested balance without having to pay the 10% early-withdrawal penalty (25% for certain SIMPLE IRAs). They may choose to spread the income from these “coronavirus-related distributions,” or CRDs, ratably over a period of three years to help manage the associated income tax liability. They may also recontribute any portion of the distribution that would otherwise be eligible for a tax-free rollover to an eligible retirement plan over a three-year period, and the amounts repaid would be treated as a trustee-to-trustee transfer, avoiding tax consequences.¹

In addition, the CARES Act included a provision stating that between March 27 and September 22, 2020, qualified coronavirus-affected retirement plan participants may also be able to borrow up to 100% of their vested account balance or $100,000, whichever is less. In addition, any qualified participant with an outstanding loan who has payments due between March 27, 2020, and December 31, 2020, may be able to delay those payments by one year.

IRS Notice 2020-50

To be eligible for coronavirus-related provisions in the CARES Act, “qualified individuals” were originally defined as IRA owners and retirement plan participants who were diagnosed with the virus, those whose spouses or dependents were diagnosed with the illness, and account holders who experienced certain adverse financial consequences as a result of the pandemic. IRS Notice 2020-50 expanded that definition to also include an account holder, spouse, or household member who has experienced pandemic-related financial setbacks as a result of:

• A quarantine, furlough, layoff, or reduced work hours
• An inability to work due to lack of childcare
• Owning a business forced to close or reduce hours
• Reduced pay or self-employment income
• A rescinded job offer or delayed start date for a job

These expanded eligibility provisions enhance the opportunities for account holders to take a CRD.

The Notice clarifies that qualified individuals can take multiple distributions totaling no more than $100,000 regardless of actual need. In other words, the total amount withdrawn does not need to match the amount of the adverse financial consequence. (Retirement investors should consider the pros and cons carefully before withdrawing money.)

It also states that individuals will report a coronavirus-related distribution (or distributions) on their federal income tax returns and on Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments. Individuals can also use this form to report any recontributed amounts. As noted above, individuals can choose to either spread the income ratably over three years or report it all in year one; however, once a decision is indicated on the initial tax filing, it cannot be changed. Note that if multiple CRDs occur in 2020, they must all be treated consistently — either ratably over three years or reported all at once.

Taxpayers who recontribute amounts after paying taxes on reported CRD income will have to file amended returns and Form 8915-E to recoup the payments. Taxpayers who elect to report income over three years and then recontribute amounts that exceed the amount required to be reported in any given year may “carry forward” the excess contributions — i.e., they may report the additional amounts on the next year’s tax return.

The Notice also clarifies that amounts can be recontributed at any point during the three-year period beginning the day after the day of a CRD. Amounts recontributed will not apply to the one-rollover-per-year rule.

Regarding plan loans, participants who delay their payments as permitted by the CARES Act should understand that once the delay period ends, their loan payments will be recalculated to include interest that accrued over the time frame and reamortized over a period up to one year longer than the original term of the loan.

Retirement plans are not required to adopt the loan and withdrawal provisions, so check with your plan administrator to see which options might apply to you. However, qualified individuals whose plans do not specifically adopt the CARES Act provisions may choose to categorize certain other types of distributions — including distributions that in any other year would be considered RMDs — as CRDs on their tax returns, provided the total amount does not exceed $100,000.

For more information, review IRS Notices 2020-50 and 2020-51, and speak with a tax professional.

¹Qualified beneficiaries may also treat a distribution as a CRD; however, nonspousal beneficiaries are not permitted to recontribute funds, as they would not otherwise be eligible for a rollover.

IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. This communication is strictly intended for individuals residing in the state(s) of AZ, CA, FL, ME, NY, OH, OK and PA. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

Watch Out for Coronavirus Scams

The FTC has received over 20,000 COVID-19 related complaints since January 1, 2020.

Source: Federal Trade Commission, April 2020

Fraudsters and scam artists are always looking for new ways to prey on consumers. Now they are using the same tactics to take advantage of consumers’ heightened financial and health concerns over the coronavirus pandemic. Federal, state, and local law enforcement have begun issuing warnings on the surge of coronavirus scams and how consumers can protect themselves. Here are some of the more prevalent coronavirus scams that consumers need to watch out for.

Schemes related to economic impact payments

The IRS recently issued a warning about various schemes related to economic impact payments that are being sent to taxpayers under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.¹ The IRS warns taxpayers to be aware of scammers who:

• Use words such as “stimulus check” or “stimulus payment” instead of the official term, “economic impact payment”
• Ask you to “sign up” for your economic impact payment check
• Contact you by phone, email, text or social media for verification of personal and/or banking information to receive or speed up your economic impact payment

In most cases, the IRS will deposit the economic impact payment directly into an account that taxpayers previously provided on their tax returns. If taxpayers have previously filed their taxes but not provided direct-deposit information to the IRS, they will be able to provide their banking information online at irs.gov/coronavirus. If the IRS does not have a taxpayer’s direct-deposit information, a check will be mailed to the taxpayer’s address on file with the IRS. In addition, the IRS is reminding Social Security recipients who normally don’t file taxes that no additional action or information is needed on their part to receive the $1,200 economic payment — it will be sent to them automatically.

Fraudulent treatments, vaccinations, and home test kits

The Federal Trade Commission is tracking scam artists who are attempting to sell fraudulent products that claim to treat, prevent, or diagnose COVID-19. Currently, the U.S. Food and Drug Administration (FDA) has not approved any products designed specifically to treat or prevent COVID-19.

The FDA had warned consumers in March to be wary of companies selling unauthorized coronavirus home testing kits. On April 21, 2020, the FDA authorized the first coronavirus test kit for home use. According to the FDA, the test kits will be available to consumers in most states, with a doctor’s order, in the coming weeks. You can visit fda.gov for more information.

Phishing scams

Scammers have begun using phishing scams related to the coronavirus pandemic in order to obtain personal and financial information. Phishing scams usually involve unsolicited phone calls, emails, text messages, or fake websites that pose as legitimate organizations and try to convince you to provide personal or financial information. Once scam artists obtain this information, they use it to commit identity or financial theft. Be wary of anyone claiming to be from an official organization, such as the Centers for Disease Control and Prevention or the World Health Organization, or nongovernment websites with domain names that include the words “coronavirus” or “COVID-19,” as they are likely to be malicious.

Charity fraud

Many charitable organizations are dedicated to helping those affected by COVID-19. Scammers often pose as legitimate charitable organizations in order to solicit donations from unsuspecting donors. Be wary of charities with names that are similar to more familiar or nationally known organizations. Before donating to a charity, make sure that it is legitimate and never donate cash, gift cards, or funds by wire transfer. The IRS website has a tool to assist you in checking out the status of a charitable organization at irs.gov/charities-and-nonprofits.

Protecting yourself from scams

Fortunately, there are some things you can do to protect yourself from scams, including those related to the coronavirus pandemic:

• Don’t click on suspicious or unfamiliar links in emails, text messages, and instant messaging services.
• Don’t answer a phone call if you don’t recognize the phone number — instead, let it go to voicemail and check later to verify the caller.
• Never download email attachments unless you can verify that the sender is legitimate.
• Keep device and security software up-to-date, maintain strong passwords, and use multi-factor authentication.
• Never share personal or financial information via email, text message, or over the phone.
• If you see a scam related to the coronavirus, be sure to report it to the FTC at ftc.gov/complaint.

¹Internal Revenue Service, IR-2020-64, April 2, 2020

IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. This communication is strictly intended for individuals residing in the state(s) of AZ, CA, FL, ME, NY, OH, OK and PA. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

Securities and Advisory Services offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC.  Davis Financial Services and Cadaret, Grant & Co., Inc. are separate entities.

Coronavirus Concerns? Consider Past Health Crises

Putting current market volatility into historical perspective can help you stay the course during turbulent times. Dollar-cost averaging does not ensure a profit or prevent a loss. Such plans involve continuous investments in securities regardless of fluctuating prices. You should consider your financial ability to continue making purchases during periods of low and high price levels. However, this can be an effective way for investors to accumulate shares to help meet long-term goals. Asset allocation is a method used to help manage investment risk; it does not guarantee a profit or protect against investment loss.

During the last week of February 2020, the S&P 500 lost 11.49% — the worst week for stocks since the 2008 financial crisis — only to jump by 4.6% on the first Monday in March.1 By all accounts, the drop was largely driven by ever-increasing fears about the potential effects of the coronavirus (COVID-19) and its ultimate impact on the global economy. Although many market observers contend that the market was overvalued and due for a correction anyway, the unpredictability, strength, and suddenness of the historic tumble was unnerving for even the most seasoned investors. If recent volatility is causing you to consider cashing out of your stock holdings, it may be worthwhile to pause and put recent events into perspective, using history as a guide. A look back Since the turn of the millennium, the market’s negative response to health crises has been relatively short-lived. As this table shows, approximately six months after early reports of a major outbreak, the S&P 500 bounced back by an average of 10.47%. After 12 months, it rebounded by an average of 17.17%. Although there are no guarantees the current situation will follow a similar pattern, it may be reassuring to know that over even longer periods of time, stocks typically regain their upward trajectory, helping long-term investors who hold steady to recoup their temporary losses, catch their breath, and go on to pursue their goals. Epidemic Month end* 6-month performance, S&P 500 12-month performance, S&P 500 SARS April 2003 14.59% 20.76% Avian (Bird) flu June 2006 11.66% 18.36% Swine flu (H1N1) April 2009** 18.72% 35.96% MERS May 2013 10.74% 17.96% Ebola March 2014 5.34% 10.44% Measles/Rubeola December 2014 0.20% -0.73% Zika January 2016 12.03% 17.45% Source: Dow Jones Market Data, as cited on foxbusiness.com, January 27, 2020. Stocks are represented by the Standard & Poor’s 500 price index. Returns reflect the change in price, but not the reinvestment of dividends. The S&P 500 is an unmanaged index that is generally considered to be representative of the U.S. stock market. Returns shown do not reflect taxes, fees, brokerage commissions, or other expenses typically associated with investing. The performance of an unmanaged index is not indicative of the performance of any particular investment. Individuals cannot invest directly in any index. Actual results will vary. *End of month during which early incidents of outbreak were reported. **H1N1 occurred during the financial crisis, when, as during other periods, many different factors influenced stock market performance. What should you do? First, keep in mind that market downturns sometimes offer the chance to pick up potentially solid stocks at value prices, which could position a portfolio well for future growth. Again, there are no guarantees that stocks will perform to anyone’s expectations — and decisions could result in losses including a possible loss in principal — but it may be helpful to remember that some investors use downturns as opportunities to buy stocks that were previously overvalued relative to their perceived earnings potential. Moreover, if you typically invest set amounts into your portfolio at regular intervals — a strategy known as dollar-cost averaging (DCA), which is commonly used in workplace retirement plans and college investment plans — take heart in knowing you’re utilizing a method of investing that helps you behave like the value investors noted above. Through DCA, your investment dollars purchase fewer shares when prices are high, and more shares when prices drop. Essentially, in a down market, you automatically “buy low,” one of the most fundamental investment tenets. Over extended periods of volatility, DCA can result in a lower average cost for your holdings than the investment’s average price over the same time period. Finally and perhaps most important, during trying times like this, it may help to focus less on daily market swings and more on the fundamentals; that is, review your investment objectives and time horizon, and revisit your asset allocation to make sure it’s still appropriate for your needs. Your allocation can shift in unexpected ways due to changes in market cycles, so you may discover the need to rebalance your allocation by selling holdings in one asset class and investing more in another. (Keep in mind that rebalancing in a taxable account can result in income tax consequences.) Questions? After considering the points here, if you still have questions about how changing market dynamics are affecting your portfolio, contact your financial professional. Often a third-party perspective can help alleviate any worries you may still hold. 1Based on data reported in WSJ Market Data Center, February 28, 2020, and March 2, 2020. Performance reflects price change, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

 

IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. This communication is strictly intended for individuals residing in the state(s) of AZ, CA, FL, ME, NY, OH, OK and PA. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

Securities and Advisory Services offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC.  Davis Financial Services and Cadaret, Grant & Co., Inc. are separate entities.

 

Could You Improve Your Personal Finances Today?

 

Simple decisions & new habits might lead you toward a better financial future.

 Provided by Jeffrey Davis

 In life, there are times when simple decisions can have a profound impact. The same holds true when it comes to personal finance. Here are some simple choices you could make that may leave you better off financially – in the near term, the long term, or both.

Use Less Credit. Every time you pay with cash instead of credit, you are saving pennies on the dollar – actually, dimes on the dollar. At the start of December, the average “low interest” credit card in America charged users 12.45%, the average cash back card 17.15%. If you want to see your bank balance grow, try consistently paying in cash. There is no need to pay extra money when you pay for something.¹

 Set up automated contributions to retirement plans & investment accounts. By automating your per-paycheck salary deferrals to your workplace retirement plan or your IRA, you remove the chore (and the psychological hurdle) of having to make lump-sum contributions. You can bolster invested assets with regular inflows of new money, without even thinking about it. Often, arranging these recurring account contributions takes 20 minutes or less of your time.²

 Bundle your insurance. Many insurers will give you a discount if you turn to them for multiple policies (home and auto, possibly other combinations). This may help you reduce your overall insurance costs.

 Live somewhere less expensive. Sure, it takes money to move, but that one-time cost might be worth absorbing, especially if you can perform your job anywhere. A look at the December United States Rent Report at ApartmentList.com reveals that the median rent for a 1-bedroom apartment in Los Angeles is $1,900. The median rent for a 1-bedroom apartment in Spokane is $630. What is the median rent for a 2-bedroom apartment in Boston? $3,200. How about in Fayetteville, North Carolina? $700.³

Look into refinancing your largest debts. Perhaps your student loans could be consolidated. Perhaps you could qualify for a refi on your mortgage (while rates are still low). Both of these moves could free up money and leave you with more financial “breathing room” each month.

Spend less money on “stuff” and more money on yourself. Many people associate possessions with well-being – the more “toys” you have, the richer your life becomes. That kind of thinking can quickly put you deep in debt. You may find yourself living on margin as your “toys” depreciate.

A wise alternative: pay yourself first and direct more of your income into retirement or savings accounts. Or if you like, use some money you would normally spend on creature comforts to attack your debt. Instead of simply entertaining yourself today, make money moves on behalf of your financial future. Too many people give their financial future little thought, and they may be in for a shock when they reach retirement age.

We all want to splurge now and then, but try spending money on memorable experiences instead of flashy items – you may find the former many times more valuable than the latter.

Forgo several purchases a month and see what happens. A recent SunTrust bank survey found that roughly a third of U.S. households earning $75,000 or more live paycheck to paycheck. Earlier this year, Money noted that the average household credit card balance was nearly $16,000. In short, people are spending too much.⁴

Some expenses are obligatory, others spur-of-the-moment and unexamined. Pause and think before you buy something; do you really need it? If you separate your needs from your wants and say no to several of them, you may find yourself living a simpler life with less debt and more cash.

Spend less than what you make, invest and save some of the difference – this is the classic path toward improving your financial situation.

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entity

Citations.

1 – bankrate.com/finance/credit-cards/current-interest-rates.aspx [12/1/16]

2 – forbes.com/sites/robertberger/2016/05/14/20-ways-to-improve-your-finances-in-under-20-minutes/ [5/14/16]

3 – apartmentlist.com/rentonomics/national-rent-data/ [12/1/16]

4 – time.com/money/4320973/why-you-are-poor/ [6/6/16]

 

Updating Your Estate Plan

When should you review it? What should you review?    

Provided by Jeffery Davis

An estate plan has three objectives. The first goal is to preserve your accumulated wealth. The second goal is to express who will receive your assets after your death. The third goal is to state who will make medical and financial decisions on your behalf if you cannot.

Over time, your feelings about these objectives may change. You may want to name a new executor or health care agent. You may rethink how you want your wealth distributed.

This is why it is so vital to review your estate plan. Over ten or twenty years, your health, wealth, and outlook on life may change profoundly. The key is to recognize the life events that may call for an update.

Have you just married or divorced? If so, your estate plan will absolutely need revision. For that matter, some, or all, of your will may now be legally invalid. (Some state laws strike down existing wills when a person is married or divorced.) If your children or grandchildren marry or divorce, that also calls for an estate plan review.¹

Has there been a loss or serious illness within your family? If so, your named executor or health care agent may have to be changed. If one family member has now become physically or financially dependent on you, that too may be an occasion for a second look at the plan. 

Has your net worth risen or declined substantially since the plan was first implemented? If you have become much wealthier in the past five or ten years (or much less wealthy), that circumstance may have altered your vision of how you want your assets distributed at your death. Maybe you want to give more (or less) to charity or your heirs. A large inheritance can also prompt you to rethink your wealth protection and wealth transfer strategy.

Have you changed your mind about what your wealth should accomplish? Today, you may view your wealth differently than you did when you were younger. New purposes may have emerged for it – new roles that it can play. Following through on those thoughts may lead you to reconsider aspects of your estate plan.

Have your executors or trustees changed their mind about their roles? If they are no longer interested in shouldering those responsibilities, no longer alive, or no longer of sound mind or reputable character, it is revision time.

Have you retired, moved to another state, or bought or sold real estate? All of these events call for an estate plan check-up.

The first step in revising an estate plan is to update essential documents. Not just your will or your trust, but also your financial power of attorney and health care proxy. Review all the names: your executor; your trustee; your health care agent. Changes in your personal (and even your business) relationships may call for alterations to those choices.

The second step is to review your risk management. Does language in your will need revision? Does a trust created years ago need to be modified or replaced? Do new estate planning vehicles need to enter the picture in order to help you adequately transfer wealth, counter estate taxes, or endow charities?

What about your life insurance? Do beneficiary forms of life insurance policies need updating? Is corporate-owned life insurance coverage you once counted on now absent? Will policy payouts be sufficient enough to help your loved ones address financial issues after your death?

The third step is to make sure your assets are in sync with your plan. For example, if you have a revocable trust, have you transferred ownership of all the assets that are supposed to go into it? Have you acquired new assets that need to be “poured in?”

If you are married and it appears certain that your estate will be taxed, you may want to own some assets and have your spouse own others. Yes, the federal estate tax exemption is portable, so any unused estate tax and gift tax exemption is allowed to pass to a surviving spouse. At the state level, though, there are different rules. So if all assets are in your spouse’s name and your home state levies an estate tax, that scenario may mean higher estate taxes for your heirs than if those assets were alternately owned by either you or your spouse.²

Even if nothing major happens in your life, review your plan every five years or so. While your life may be uneventful over five years, tax law, the financial markets, and business climates may change significantly. Those kinds of shifts can impact your estate planning strategy.

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entity

Citations.

1 – 360financialliteracy.org/Topics/Retirement-Planning/Estate-Planning-Basics/How-often-do-I-need-to-review-my-estate-plan [8/4/16]

2 – time.com/money/4187332/estate-planning-checkup-items-review/ [1/20/16]

Filial Responsibility Laws

Could you be required to provide financial support to your parents?  

 Provided by Jeffery Davis

Imagine your parents outliving their money. A terrible thought, right? Should this occur, there will be one of two outcomes. Either your parents will move in with you (or someone else), or your parents will become indigent.

Hopefully, your parents have saved, invested, and managed their money well enough to avoid such a plight, whether they live together or separately. If either or both of your parents do end up in such dire financial straits, the burden of rescuing them could fall on your shoulders. That is because 29 states have filial responsibility laws.^1,2

Imagine drawing down your retirement savings to pay for nursing home care. Thanks to these obscure, but enforceable, state laws, this scenario is not unimaginable.

Nursing homes may turn to these statutes to demand payment of eldercare bills. These laws can be challenged in court, but sons and daughters may have little recourse. In 2012, the Superior Court of Pennsylvania upheld a lower court ruling requiring a man to pay off a $93,000 long-term care bill owed by his mother to a nursing home. In August 2015, the same state court upheld a ruling that a man had to pay his mother $400 a month in filial support.^1,2

In the future, will assisted living facilities and nursing homes cleverly exploit such laws (and legal precedents) to file claims or lawsuits against the children of patients? Baby boomers, Gen Xers, and millennials may face that risk.
 

Some filial laws do offer loopholes. In Pennsylvania, for example, children cannot be held legally responsible under the state filial law if their parent abandoned them for a decade or longer during their childhood or if the parent’s immediate family is incapable of paying the debt.²

How easily can a nursing home saddle you with your mom or dad’s eldercare bill? Not that easily. In order to cite filial responsibility laws, the nursing home or assisted living facility usually has to provide proof that the resident cannot pay the cost of care.³

That hurdle may not deter eldercare providers as baby boomers enter their sixties, seventies, and eighties. Providers may be forced to explore every possible avenue to collect the payments that will keep them in business.

Will Medicaid pay for eldercare if a parent runs out of money? It often will. If the applicant is already eligible for Medicaid prior to requesting coverage, that coverage can be retroactive up to three months from its starting date.³

Medicaid does have its potential downside. By law, state Medicaid programs must try to collect reimbursement for coverage of eldercare costs after a Medicaid recipient passes away. While the value of a car and a home have no effect on someone’s eligibility for Medicaid, that home and car can be claimed by the state as it seeks to recoup its costs. An estate is usually spared from this effort if the deceased person leaves behind a surviving spouse, children under 21, or disabled or blind children of any age. Property held in a trust should also be exempt.³

If you & your parent(s) jointly own assets or accounts, that could be a problem. As an example, say you and your parent jointly own a townhome. If you attempt to sell it after your parent’s death while the state is trying to recoup Medicaid costs, the state may place a lien on it. You will have to give up some of the sale proceeds to settle the lien.³

Here is a “what if” worth considering: if your parents become destitute, how much financial responsibility will you be willing to assume on their behalf? Given the presence of filial laws and the possibility of Medicaid liens, you may end up more involved in their financial affairs or estate than you expect.

For the record, filial laws remain in place in Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, and Puerto Rico.³

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entities.

Citations.

1 – tinyurl.com/zmg9w5d [6/5/16]

2 – triblive.com/news/valleynewsdispatch/9757033-74/law-nursing-support [3/19/16]

3 – nerdwallet.com/blog/banking/broke-parents-medical-debts/ [7/2/15]

Do Our Biases Inhibit Our Retirement Savings Efforts?

They may affect our attempts to build wealth.   

 Provided by Jeffery Davis

Picture an 18-wheeler, its 4,000-cubic-foot cargo trailer filled to capacity with stacks of $100 bills. The driver shuts and locks the trailer, closing the door on roughly $10 billion.

Now imagine that truck driving off to a landfill, where that $10 billion will be dumped, shredded and buried, rendered useless.

As the day goes on, 170 more 18-wheelers start up their engines and carry the exact same payload to the same destination. When the convoy finishes its work, $1.7 trillion is gone.

Unimaginable? Metaphorically speaking, perhaps not. The National Bureau of Economic Research, a respected non-profit think tank, says we are forfeiting $1.7 trillion in potential retirement savings. Why? Simply because of our biases.¹

Two major biases can impact our saving & investment decisions. NBER identified them in a study published in its Bulletin on Aging & Health in April.¹

Present bias occurs when we value the present over the future. To see how common this bias is, NBER’s research team asked people a simple question: “Would you rather receive $100 today or $120 in 12 months?” As a variation, they also offered a choice between having $100 now or having $144 after waiting 24 months. Fifty-five percent of the respondents turned out to be “present biased” – that is, they wanted to take the $100 right away rather than wait to get a greater sum.^1,2

Patience, of course, is fundamental to investing and retirement saving. Present bias is one of its enemies. From another angle, it also rears its head when volatility rocks Wall Street and we see panic selling. That panic is partly fueled by present bias. The sellers feel the pain of the moment, and lose sight of the potential in the future.

Present bias may also influence participation in workplace retirement plans. If an employee has tight personal finances or little understanding of investment principles, dollars in hand today may seem much more tangible and important than dollars that might be earned years from now. That leads us straight to the second bias NBER says plagues us.

Exponential-growth bias occurs when we misunderstand compounding. Illustrate the power of compounding to a young adult starting to save for retirement, and “it all becomes clear” – there is perhaps no better way to show the long-term savings potential of a tax-deferred retirement account.¹

Sadly, this is a lesson some people never grasp – either because it is not shown to them or because they lack mathematical or financial literacy. Someone unfamiliar with compounding may reason that assets in a retirement account simply grow by a fixed amount each year. That kind of misconception may make a workplace retirement plan less attractive to an employee – or alternately, it may make them think of it as if it were a fixed-rate investment vehicle.

As part of its research, NBER asked retirement savers a simple compounding question. Seventy-five percent of the survey respondents answered it incorrectly, and about 70% of respondents underestimated how much the asset in question would grow in value over time.^1,2

Even meager compounding can be impressive. The Rule of 72 is widely known, but the 2-20-50 Rule also deserves to be remembered: an asset that increases in value by just 2% annually for 20 years will be worth about 50% more at the end of that 20-year period.²

Present bias & exponential-growth bias can deter people from saving for the future. They are easy to harbor, and easy to fall back on. Even longtime investors and retirement savers may fall prey to them. Challenging these biases is not only wise, but potentially useful. NBER estimates that if Americans could rid themselves of these two biases, our nation’s total retirement savings would increase by 12%.¹

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entities.

Citations.

1 – bloomberg.com/news/articles/2016-04-27/how-americans-blow-1-7-trillion-in-retirement-savings [4/27/16]

2 – theatlantic.com/business/archive/2016/07/two-biases/491576/ [7/6/16]

 

 

 

Think about tomorrow, not just today.

 Provided by Jeffery Davis

No woman wants to end up impoverished, out of options, left to fend for herself on the streets. Only a tiny percentage of women from affluent households will experience this retirement nightmare, but that does not mean the risk should be dismissed.

This is the financial circumstance you may fear more than any other. What can you do to counter that fear and guard against running out of money in retirement?

The first step is to plan. You must plan with the knowledge that you might outlive your spouse; that you might spend some, or even all, of your retirement alone. Because of your potentially longer lifespan and the lack of a spousal safety net, it is not unreasonable to assume that you may need 150% of the retirement money that a man in your situation might need. That may be stunning, but it is worth realizing. Imagine your children having to bear the financial burden of taking care of you when you are elderly. If you have no children, imagine having to rely on welfare and Medicaid at that time. Surely that is not the future you imagine or want.

Value your future comfort as much as you value your comfort today. Think ahead and investigate what it might take to retire comfortably in terms of income and lifetime savings. If you haven’t done much financial preparation for the future, you may be shocked when you see what needs to be done. Regardless, there is no avoiding it. Time is your friend in these matters, and procrastination in saving and investing only makes your retirement more of a question mark.

See wealth as something you build, not something you own. So often, society looks at wealth in terms of material items. You spend money to acquire those items, and, with rare exceptions, their value depreciates as years go by.

Rather than direct your money into depreciating items, you can save and invest it. You can steadily contribute to IRAs, brokerage accounts, workplace retirement plans, and other vehicles that permit you to invest in equities. Investing in equities is crucial, for they offer you the potential to grow your money at a rate faster than inflation. Yes, Wall Street has some bad years as well as good ones – but, over several decades, the good have outnumbered the bad. The broad benchmark of Wall Street – the S&P 500 – posted annual gains in 31 of the 41 years from 1975-2015, sometimes large ones.¹

Many women are concerned about not losing money. In retirement, that is indeed a prime concern for both women and men. Prior to retirement, though, accepting some risk in your investments can lead to much greater potential reward (i.e., yield) than you might get from the typical savings or checking account or fixed-income bank investment.

Plan income streams. Too many seniors rely on a single income stream in retirement – Social Security. In fact, 47% of unmarried elderly Social Security recipients rely on Social Security for at least 90% of their income. In 2015, the average monthly benefit was just $1,335.²

On average, an American woman retires at age 62. In 2014, 40.8% of women who began receiving Social Security retirement benefits filed for them at – not surprisingly – age 62. The upside of this decision was that they gained an income stream. The downside was that by filing for benefits at 62, they received a monthly benefit about 30% smaller than the one they could have received by first claiming benefits at 66.³

One in four 65-year-old women today will live to be at least 90. Can you imagine relying heavily, or solely, on Social Security for 20, 25, or 30 years? If you find yourself in such straits, you will be consigned to a life of poverty, unless you sell or borrow against assets you own to come up with more retirement money.³

Social Security cannot be your lone income source in retirement, and, before you retire, you must arrange others.

What is a chat with a financial professional worth? It may be worth a great deal – it may be eye-opening and illuminating with regard to your retirement prospects. If you want to see where you stand today, what you may want to do to approach retirement with confidence and adequate financial resources, start there.

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entities.

Citations.

1 – 1stock1.com/1stock1_141.htm [6/28/16]

2 – ssa.gov/news/press/basicfact.html [10/13/15]

3 – nbcnews.com/business/retirement/biggest-mistake-women-make-social-security-benefits-n407816 [8/11/15]

Jeffery Davis Presents: WEEKLY ECONOMIC UPDATE

	August 1, 2016 CONFIDENCE INDICES HOLD STEADY Rising half a point from its previous reading, the University of Michigan’s consumer sentiment index finished July at 90.0. The Conference Board’s monthly household confidence gauge came in at 97.3 last week, near its (revised) June mark of 97.4.1 ROUNDING UP THE LATEST REAL ESTATE NEWS New Census Bureau data shows new home sales up 3.5% in June after a 6.0% May setback. Pending sales of existing homes increased 0.2% in June, reported the National Association of Realtors. The S&P/Case-Shiller home price index (20-city composite) rose 0.9% in May, putting its annualized gain at 5.2%.1 ECONOMY GREW JUST 1.2% IN Q2 The Bureau of Economic Analysis disappointed Wall Street with its initial estimate of second quarter GDP. Economists polled by Bloomberg expected growth of 2.5%. While household consumption rose 4.2% in Q2, private fixed investment took its biggest quarterly fall since 2009, slipping 3.2%.2 STOCKS PULL BACK A BIT July ended with the S&P 500 at 2,173.60, the Nasdaq at 5,162.13, and the Dow at 18,432.24. Their performance numbers for the week: S&P, -0.07%; Nasdaq, +1.22%; Dow, -0.75%.3 THIS WEEK: Monday, ISM issues its July manufacturing PMI and AMC, AmeriGas, CNA Financial, Frontier Communications, Loews, Macerich, and Vulcan Materials offer earnings. June consumer spending numbers arrive Tuesday, in addition to earnings from Aetna, Archer Daniels Midland, Avis Budget Group, Choice Hotels, Cummins, CVS Health, DreamWorks, Electronic Arts, Fitbit, Genworth Financial, Hanesbrands, Hyatt Hotels, Martin Marietta, Molson Coors, Papa John’s, Pfizer, Pitney Bowes, Procter & Gamble, Royal Caribbean, and Seagate Technology. ADP’s July payrolls report emerges Wednesday, plus ISM’s services PMI and earnings from Allstate, Clorox, GoDaddy, Herbalife, Humana, Marathon Oil, MetLife, Noble Energy, Occidental Petroleum, Office Depot, Prudential, Tesla, Tesoro, Time Warner, Transocean, 21st Century Fox, and Western Union. Thursday, initial claims figures and the July Challenger job-cut report complement earnings from Activision Blizzard, AMC Networks, Chesapeake Energy, Duke Energy, Fluor, Icahn Enterprises, iheartMedia, Jamba, Kellogg, Kemper, LinkedIn, Lions Gate, Parker-Hannifin, Priceline, Sempra Energy, Symantec, Take-Two, TripAdvisor, Viacom, Wingstop, and Zynga. The federal government’s July jobs report appears Friday, plus earnings from Kraft Heinz, U.S. Cellular, Virgin America, Weyerhaeuser, and William Lyon Homes.   % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +5.78 +3.84 +10.36 +6.43 NASDAQ +3.09 +0.99 +17.46 +14.65 S&P 500 +6.34 +3.08 +13.64 +7.00 REAL YIELD 7/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.03% 0.52% 0.38% 2.41% Sources: wsj.com, bigcharts.com, treasury.gov – 7/29/163,4,5,6 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.
Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC. Davis Financial & Cadaret Grant are separate entities. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. Citations. 1 – investing.com/economic-calendar/ [7/29/16] 2 – bloomberg.com/news/articles/2016-07-29/u-s-economy-grew-a-less-than-forecast-1-2-in-second-quarter [7/29/16] 3 – markets.wsj.com/us [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16] 4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16] 5 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/29/16] 6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/29/16]

What does history tell us – and should we value it? 

Provided by Jeffery Davis

As an investor, you know that past performance is no guarantee of future success. Expanding that truth, history has no bearing on the future of Wall Street.

That said, stock market historians have repeatedly analyzed market behavior in presidential election years, and what stocks do when different parties hold the reins of power in Washington. They have noticed some interesting patterns through the years, which may or may not prove true for 2016.

Do stocks really go through an “election cycle” every four years? The numbers really don’t point to any kind of pattern. (Some analysts contend that stocks follow a common pattern during an election year; more about that in a bit.)

In price return terms, the S&P 500 has gained an average of 6.1% in election years, going back to 1948, compared to 8.8% in any given year. The index has posted a yearly gain in 76% of presidential election years starting in 1948, however, as opposed to 71% in other years. Of course, much of this performance could be chalked up to macroeconomic factors having nothing to do with a presidential race.¹

Overall, election years have been decent for the blue chips. Opening a very wide historical window, the Dow has averaged nearly a 6% gain in election years since 1833. Across that same time frame, it has averaged a 10.4% gain in “year three” – years preceding election years.²

Many election years have seen solid advances for the small caps. The average price return of the Russell 2000 is 10.9% in election years going back to 1980, with a yearly gain occurring 78% of the time.¹

Do stocks respond if a particular party has control of Congress? A little data from InvesTech Research will help to answer that.

InvesTech studied S&P 500 yearly returns since 1928 and found that the S&P returned an average of 16.9% in the two years after a presidential election when the White House and Congress were controlled by the same party. In the 2-year stretches after a presidential election, when Congress was controlled by the party that didn’t occupy the White House, the price return of the S&P averaged 15.6%. When control of Congress was split – regardless of who was President – the S&P only returned an average of 5.5% in those 2-year periods.²

Could stock market performance actually influence the election? An InvesTech analysis seems to draw a correlation, however mysterious, between S&P 500 performance and whether the incumbent party retains control of the White House.

There have been 22 presidential elections since 1928. In those 22 years, the incumbent party won the White House 86% of the time when the S&P advanced during the three months preceding Election Day. When the S&P lost ground in the three months prior to the election, the incumbent party lost the White House 88% of the time. Of course, other factors may have been considerably more influential in these elections, such as a given president’s approval rating and the unemployment rate.²

Annual returns aside, is there a mini-cycle that hits stocks in the typical election year? Some analysts insist so, with the cycle unfolding like this: stocks gain momentum during primary season, rally strongly as the presumptive nominees appear and party conventions occur, and then go sideways or south in November and December.³

There might be something to this assertion, at least in terms of S&P 500 performance. A FactSet/Wall Street Journal analysis shows that, in election years starting in 1980, the S&P has advanced an average of 4.9% in the period between when a presumptive nominee is declared and Election Day. After Election Day in these nine years, it declined about half a percent on average.³

How much weight does history ultimately hold? Perhaps not much. It is intriguing, and some analysts would instruct you to pay more attention to it rather than less. Historical “norms” are easily upended, though. Take 2008, the election year that brought us a bear market disaster. The year 2000 also brought an S&P 500 loss. While a presidential election undoubtedly affects Wall Street every four years, it is just one of many factors in determining a year’s market performance.¹

Jeffrey Davis may be reached at (716) 691-8207 or jdavis@davisfinancialservice.com.

http://www.jdavis@davisfinancialservice.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Cadaret Grant & Co. Inc. Member FINRA/SIPC.

Davis Financial & Cadaret Grant are separate entities.

Citations.

1 – marketwatch.com/story/2016-predictions-what-presidential-election-years-mean-for-stocks-2015-12-29 [12/29/15]

2 – kiplinger.com/article/investing/T043-C008-S003-how-presidential-elections-affect-the-stock-market.html [2/16]

3 – tinyurl.com/j82mg4c [6/12/16]