Welcome to 2021! We hope that you and your family had an enjoyable holiday season. Last year presented some of the most challenging times for everyone and we are hoping that a new year will bring better results.
We appreciate the confidence that you have shown in our practice. Once again, our primary goal this year is to continue our tradition of helping clients pursue their personal financial goals. To make that process more efficient, we send our clients the updated and attached 2021 CHECKLIST so they can identify any items they anticipate needing our help with this year.
We take pride in our ability to understand and effectively respond to our clients’ needs and concerns and enjoy providing timely information and holistic service to them. One of our company’s main objectives is to always offer our clients a first-class experience.
As a valuable client, we thank you for giving us the opportunity to help you work toward your financial goals. We look forward to a great year!
Looking Ahead to 2021
2020 was a roller coaster year for investors. After setting new highs in February, the equity markets suffered a major retreat in March and by year-end once again reached new highs. For much of the year, the daily headlines kept investors on the edge of their seats. COVID restrictions and lockdowns coupled with recession fears, geopolitical unrest, interest rate concerns and U.S political division all kept us wondering how each event would affect equity markets. Equity volatility left many investors nervous and fearful. Despite this backdrop of concern, in the late 4th quarter, many equity indexes set new highs.
For 2021, investors should once again remember to “proceed with caution.” With a new administration, investors need to pay attention to proposals that affect their situation. Although they are ultra-low right now, the direction of interest rates will still be an important factor for investors. Stock market volatility and the negotiation of trade with other countries could provide commotion for investors in 2021. Having a solid foundation, design and strategy is critical to the outcome of your financial plans. Keeping your plan up to date is always wise and will be especially integral. We are staying updated on the issues that may affect your personal situation. Our prime mission is to provide our clients with guidance and support on the road to their financial goals.
This is a good time to review and discuss your plans with us. We can help you determine if you are still on track to meet your long-term objectives, confirm your time horizons and your risk tolerance. If you have any questions or concerns, please call our office and we would be happy to assist you.
Specific Areas to Watch in 2021
Stock Market Valuations
Analysts theorize that valuations are one of the key predictors of equity returns. While equities have climbed higher, so have their valuations. Investors enjoy making money in their equity portfolios, but those who need access to their money in the next 5 to 10 years should understand that current valuations could lead to the possibility of lower returns. Risk is a part of investing and investors need to balance current conditions with their personal tolerance for risk. Most analysts feel that equity prices can continue to rise in 2021, however, we must understand that it’s near impossible to accurately predict short term moves. As financial professionals, we will continue to carefully monitor equity markets.
President-elect Joe Biden is preparing to take office on January 20. His incoming administration faces many pressing problems, including the pandemic and uncertain growth. Analysts feel that COVID medical and financial solutions will be his team’s first priority. During the campaign, he talked about addressing many issues from climate change to increasing taxes for wealthy, high earning Americans. The uncertainty around the trade relationship between the U.S. and China is also a key issue that needs to be addressed. In 2021, investors need to stay watchful on which proposals will be enacted and how they will affect them. 2021 could prove to be a very volatile year and we need to be attentive to how policy changes affect investors.
Interest rates in 2020 hit record low levels several times. The Federal Reserve cautioned that rates may stay near these rates for the foreseeable future. Low interest rates allow borrowers to finance at lower costs and they also can make equities look attractive for investors seeking returns. Low Interest rates are not attractive for bond holders or cash investors but chasing better returns can be costly. For 2021, we will continue to keep a watchful eye on interest rates.
Your Personal Situation
Your personal situation is our highest concern. We make it a priority to keep our clients informed throughout the year.
Please keep in mind that each individual or household situation is different and we always want to help you with your personal financial goals.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Arbor Point Advisors LLC. Capital Income Advisors, Securities America, Inc., and Arbor Point Advisors LLC are separate entities. The information you provided in your New Account Application is essential information that your advisor relies on when making recommendations for your account. If you experience a change in your financial situation or investment objectives, or if you wish to implement new or modify any existing restrictions concerning the management of your account, it is important that you contact your advisor to update your information.
The views expressed are not necessarily the opinion of Securities America and should not be construed, directly or indirectly, as an offer to buy or sell securities mentioned herein. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. This article is for informational purposes only. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. Past performance is no guarantee of future results. This article provided by The Academy of Preferred Financial Advisors, Inc. ©2021