Insights

Year-End Planning: Roth Conversions and CA Proposition 19 Impacts

As year-end approaches, it is important to address any unresolved planning or tax issues for 2020 and ensure you are on track for 2021.

Possible Democratic “Blue Wave”: Stock Market Implications

As the 2020 Presidential election draws nearer, recent polling and betting sites suggest that former Vice President Joe Biden will maintain his lead over incumbent Donald Trump into election day. If the election on November 3^rd results in a Biden presidency and Democratic control of the House and Senate, it is important to understand how this could impact the stock and bond markets and general tax and estate planning. First, we will examine the market impact that a Democratic “blue wave” could have on equities.

Taking Advantage of Today’s Low Interest Rate Environment

As a result of the coronavirus pandemic and associated economic shutdown, the Federal Reserve has continued its course of accommodative monetary policy. In March, it cut its benchmark interest rate to 0.0% – 0.25%. While this has provided some challenges for savers and more risk-averse investors, it can present some beneficial opportunities as well.

With rates near historic lows, here are some ways in which you might benefit from current monetary policy:

Tech Bubble Déjà Vu?

Executive Summary

• Market Capitalization of 5 largest stocks approaching levels of previous stock market bubbles
• Indications are mixed as to whether a bubble exists, but enough to be on a bubble alert
• Prudence suggests not being overly reliant on the largest firms and Tech stocks in general
• Make sure there is an allocation to various laggard assets, as they could outperform later

For over a decade now, we have witnessed a prolonged cycle in which growth stocks – particularly large technology companies – have significantly outperformed most other U.S. stocks.  Additionally, U.S. stocks overall have far outperformed foreign stocks over the same time period.  As a result, we are now experiencing one of the largest divergences in performance between these large growth stocks and the rest of the stock market. This has also resulted in the five largest U.S. companies taking a very large share of the entire U.S. stock market, and the global stock market.  This is very reminiscent to conditions just prior to the Tech Bubble that burst in 2000.  How real or imminent is this risk?   Is it time to seek other alternatives?

WESCAP Group 2020 2nd Quarter Market Update

Global monetary and fiscal stimulus on an unprecedented scale along with business reopening measures have done wonders this last quarter for global stock markets, commodities and credit-sensitive fixed income markets.