COVID-19 UPDATE – March 2020

Much like many of you, we have been working diligently on implementing our Business Continuity Plan, and we feel that we are prepared for any contingency. We are confident in our ability to continue to provide you the best advice and service possible. We are diligently working in
order to better understand these unusual and uncertain times. We have experienced difficult times in our past, and want to remind you that we are a resilient nation and people. We will get through this and believe that we all will prosper on the other side.

Members of our team are all healthy, and we are taking precautions in order to minimize our risks of infection. Some of us are working from home, as we originally designed our technology for mobility. We are delighted that we chose that option. We have staffed offices and phone coverage at all locations.

As always, please call us with questions or concerns. We always enjoy talking with you.

February Market Commentary

Since our fourth quarter market commentary, a “black swan” has emerged, negatively altering the trajectory of the financial markets and the outlook for global economies. Wikipedia defines a black swan as “an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.” On March 11th, the World Health Organization (WHO) declared the outbreak of the new coronavirus (COVID-19) a pandemic. With the first case reported in the Chinese city of Wuhan in December 2019, COVID-19 has now spread to over 114 countries and territories. More than 3,487 people have become infected with the virus in the United States in 49 States, the District of Columbia, Puerto Rico, Guam and the Virgin Islands. There have been 167,511 cases reported across the globe.

As of this publication, Italy has closed all shops, except grocery stores and pharmacies. Currently, Italy has over 24,000 confirmed cases. Notably, these numbers are continuing to accelerate. Currently in the United States, the Center for Disease Control and Prevention (CDC) is recommending social gathering changes, like avoiding crowds, cruise travel, and all non-essential air travel. In the past few days, sporting events have been canceled and universities/schools are closing across the country. More recently, many public school systems, including the largest system in the nation, New York City, have closed, along with restaurants and bars across the country. Today, 7.1 million Americans in the San Francisco, California area are faced with a “shelter in place” order until April 7, as the city attempts to contain the outbreak.

Our hope is that you and your families remain safe from this virus. Not only is this pandemic a social and healthcare issue, it has quickly become a financial issue. In less than three weeks from the peak of the stock market, stocks have entered a bear market, meaning stocks have fallen over 30% from their peak in mid-February. This decline is historically the quickest time stocks have fallen over 30% from their peak.

Therefore, financial markets have quickly priced in a lot of negative news. To add to the uncertainty, on March 11th, OPEC and Russia disagreed over oil production cuts, leading Russia to initiate a price war in the oil markets. A plunge in oil prices contributed to concerns about U.S. shale producers and their ability to pay back debt if prices continue to fall. All of this means economic activity will dramatically slow over the next few months.

These issues have led to uncertainty and panic in the financial markets over the past four weeks.
However, for long-term investors, valuations have become much more attractive for stocks. In order to gain more confidence in a market recovery, we are looking for strong monetary policy from the Federal Reserve, strong fiscal policy from Congress and the White House, expanded testing for COVID-19, and a peaking of the COVID-19 cases. In the meantime, we believe it remains important to be disciplined with your asset allocation and diversification in order to properly balance your risk and return objectives.

While it may be tempting to cash out of the market until these events pass, although past performance does not guarantee future results, history has demonstrated stock markets eventually recover. In other words, as difficult as it may be, staying invested through all types of markets have contributed to better long-term returns. However, it remains important to maintain adequate cash reserves for future spending needs. If you should have any questions about your investments, please call us in order to discuss strategies to meet your needs.

Your Advisors at 9258 Wealth Management

9258 Tax Preparation and Planning

As we inch closer to April 15th, here are a few reminders:

  • While all individual taxpayers are eligible for an automatic extension to October 15th to file their Form 1040, this typically does not extend the payment of tax due past April 15th. However, these are unprecedented times. It was just announced that if you still have tax due for the 2019 tax year, you can defer payment for 90 days with no interest and/or penalties assessed. This applies to any taxpayer with tax owed of up to $1 million. However, while an extension past April 15th is common, we encourage you to file on time or as soon as practical thereafter as many taxpayers have refunds.
  • If you qualify, IRA and Roth IRA contributions are due April 15th. Keep in mind that the SECURE Act now allows for traditional IRA contributions past age 70 ½ for those with earned income. Also, consider a Roth IRA contribution in lieu of a traditional IRA contribution as the Roth IRA withdrawals during retirement will be tax-free.
  • If you extend your business and/or individual tax returns, your SEP IRA, profit sharing, and employer SIMPLE IRA contributions can be delayed until you file those returns. Otherwise, those contributions are due prior to filing your returns.
  • HSA contributions, if made directly to your HSA account vs. through payroll, can be made up until April 15th. Payroll deductions for HSA contributions are typically done on a calendar year basis.
  • While the SECURE Act did adjust the age for required minimum distributions to begin, if you turned age 70 ½ during 2019, you are required to take your first distribution by April 1, 2020 (not April 15th) unless you meet an exception.Don’t forget to file gift tax returns by April 15th if you provided gifts in 2019 beyond the annual exclusion of $15,000 per gift recipient (or $30,000 if you elect gift splitting).
  • Typically, if you are required to make estimated tax payments during the year, the first estimate is due April 15th. We have not yet heard definitively if these payments will also be deferred 90 days similar to any tax owed for 2019.

Featured Professional of the Month

Tax season certainly makes us appreciate the dedication and hard work of our tax professionals. Leading the team is Ron Evans, CPA, Executive Vice President and Director-Tax Services for John F. Dickey & Co, a division of 9258 Wealth Management.

Ron has been with John F Dickey & Co for over 20 years. He graduated from the University of Cincinnati and is a member of the AICPA and OSCPA. He is active in the community serving as a Diplomat and Ambassador for the Fairfield Chamber, Treasurer of the Exchange Club of West Chester, and Vice President of Fairfield BNI.

Thank you Ron and staff for your professional work for our clients.

Save the Date!

A reminder to mark your calendars for the
Salt Lick Creek Ranch Farm Party
Saturday, October 10, 1:00 – 7:00 pm