Stocks Are Sparked for Gains in 2021
By Holly Konrady, M.Ed., E-RYT 500
As the end of the year approaches, it’s time to consider strategies that could help you reduce your tax bill. But most tax tips, suggestions, and strategies are of little practical help without a good understanding of your current tax situation. This is particularly true for year-end planning. You can’t know where to go next if you don’t know where you are now.
What a month November was! Here are some of the highlights:
Members of Generation X, those born between 1965 and 1980, largely grew up before the internet and cell phones.1 This generation prides itself on self-reliance and entrepreneurship, boasting membership as diverse as Jeff Bezos, Serena Williams, and Julia Roberts.2 But Gen X-ers have also dealt with some unique financial challenges. Many were hit by the early 1990s recession as they were beginning their careers, further buffeted by the dot-com crash of 2000 and the Great Recession in 2008. What can members of Generation X do now to shore up their finances for the future?
Real-time European COVID-19 and economic data provides an insight into how the pandemic is affecting economies around the world. We’re monitoring real-time data because traditional economic data is too slow to pick up the changes that are occurring.
Bond markets have had quite a ride since Election Day. The 10-year Treasury yield had been climbing very slowly in the months leading up to the election as the economy improved, but possibly also in anticipation of a potential Democratic sweep that could lead to a larger stimulus package. As shown in the LPL Chart of the Day, as polls were starting to close on Election Day, the 10-year Treasury yield had moved above 0.90%, a level at which it had not closed since June and then only barely. But then early results out of Florida and North Carolina let us know that this would be a closer election than many thought, and yields fell dramatically.
What are appropriate checklists for year-end tax planning?
As the traditional giving season approaches, there is one important item to add to your to do list: Create a holiday budget. Before the gift shopping and wrapping begins, take control of your wallet through financial preparation. Remember, you can potentially avoid the credit card crunch and the dangerous pitfall of borrowing against your company’s retirement savings plan or IRAs.
The election is over, but the questions are mounting. We don’t know who will be the next president as of Wednesday morning, but we do know that stocks tend to do well the final two months of an election year. “Once the uncertainty is over, stocks tend to rally in November and December, with November the best month of the year during an election year,” explained LPL Financial Chief Market Strategist Ryan Detrick. “Of course, 2020 isn’t like any other year, and we still could be a ways away from who the winner will be.”