More of the same 2021 Jan

More of the same.

In my last blog, I share some insights from one of our managers about how the see the economy and the markets shaping up in 2021.  I touch briefly on the impact of the potential impact of the political and policy changes ushered in by the 2020 election.  Our point of view was and is that this will have an impact but not as much as other factors like the stimulus and the virus/vaccine.

Over the last few weeks, I have had several questions as to why won’t the political change make a sweeping difference in the economy.  The answer is very simple.  It is more of the same. 

For better or worse, the new policies are the old policies.  The new politics are the old politics.  What this means is that business understands how to manage around this new/old set of rules, regulations, tax policies etc.  I am not stating that it will be better or worse for the economy or the markets, just that the markets hate change.  Investors hate uncertainty.  The economy hates the unknown.  I believe we can all agree that there is very little unknown about the new/old policies being ushered in for at least the next 2 years.

With this in mind, we believe that it is important to introduce more tactical, tax efficient and targeted investment strategies into our manager mix. 

Let me briefly share what this means and what this does not mean.

As an example: if your portfolio is currently allocated 60% equity and 40% fixed income.  It does not mean that we will be radically changing in the 60/40 allocation.  What it does mean is that the 60% equity and 40% will be more focused and tactical.  A specific example of this is that State Street is more strategic in its allocation but New Frontier is more tactical.

There are of course exceptions.  When making a change to a portfolio we need to be aware of the tax impact of any changes.  Taxes will become a bigger issue over time.   In 2026, if congress takes no action, individual tax rates will revert to the pre-Trump tax rates.

We also want to announce that TFG has launched new Television Show called Plan Smart Retire Well.  It airs on WPHL channel 17 at noon on Sundays.  The shows will be posted on our website just in case you miss them.

We are also re-launching our digital newsletter.  So keep an eye out for it.  Lots of good information for you to read.

It is our hope that 2021 will bring a return to a more normal lifestyle for all of us.  For those over 65, please don’t forget to register for your vaccine.

Be well and stay safe.