February 2020 Newsletter

FEBRUARY 2020 Newsletter                                                          

Since there are too few people exclaiming about the wonderful results in stock market accounts, I will continue. 2019 provided returns for many equity investors of at least 20%. The significant fact behind all of this is that the stock market has records going back to the late 1800’s and every time one looks at long term results from however one wants to identify “long term”, the results are excellent - especially in comparison to bonds. I always think it is the most democratic or fair investment because everyone and anyone can be participating with a few dollars (or a lot of dollars) per month.

How does one get that long-term result?  Easy - get in and learn to ride the bumps. That is the secret that many have never learned, nor, unfortunately, have many members of our media. Do they not know? Or don’t they discuss it because then much of their material disappears? One might call that dishonest. 

Frequently I pick up a financial magazine delivered to our office.  Inside there is likely an article discussing how more money left equity (stock) investments last year than went in. In addition, numbers are given for the greater amounts invested in bond investments…the opposite of what should have occurred! But almost 100% of our clients stayed the course and had exceptional returns for the year of 2019.

I am not sure if this is good or bad - but we get very few calls regarding rocky markets - and for those people who do call me, they usually end the conversation with, “I knew that’s what you would say.” That’s ok, if you don’t mind me repeating myself time and again, please call.

People have grown in confidence and it is easier these days to hear why the market can continue to have good returns into the future. A few reasons are: low unemployment, increasing wages for the middle class, rising optimism of the people, trade deals that have occurred and are occurring, rapid pace of technological advancement, lower regulatory burdens, strong corporate earnings, and strong household earnings and net worth.

Another problem facing investors is the tendency to think they have missed the market when they hear of Tesla stock rising - or some other phenomenal stock increase. But that is not how the smart people make money. If invested wisely, their holdings will also reflect great increases in one or more stocks. Those that think it was wise to invest in Tesla one day and wise to figure out the day they should get out, will have to do it on their own…and I think few do it.

So, love the stock market returns and how they help you enjoy additional retirement income while also growing your account value over time. For those in the accumulation stage, or in retirement, stay the course. It is a successful path to a good life.


OH NO, ALL HELL IS BREAKING LOOSE. The DJIA is going to be down over 500 points, so are all the indexes (in terms of percentages). They have found more cases of Wuhan coronavirus and, around the world, there are 81 dead from it!  Markets are PLUNGING, oil prices are down and this is TERRIBLE! 

Yes, of course it is, but how many viruses have caused other plunges? Do you remember announcements of SARS, MERS, bird flu, EBOLA, and swine flu?

A medical doctor on TV advised common sense: stay inside when you are sick, wash your hands, reduce unnecessary travel to China, and, yes, wearing masks can help. Also, remember 35,000 people each year in the United States die from the flu and 140,000 a year worldwide die from measles. 

No single event has caused the market to collapse. Many single events hyped over the years have caused investors to make bad decisions regarding their investments. The answer is: STAY THE COURSE!


The recently enacted Secure Act made many changes that impact one’s retirement planning.  Following are four of the more relevant provisions:

  1. The Stretch IRA.  Previously, a beneficiary could elect to receive Required Minimum Distributions (“RMDs”) over the beneficiary’s lifetime.  Now, a beneficiary must withdraw the entire amount within 10 years of the owner’s death.  Certain caveats apply (e.g. surviving spouses are excluded from this requirement), but the unfortunate likelihood is that a child may be forced to pay higher income taxes unnecessarily during the course of his working years.
  2. Penalty-free withdrawals in case of birth or adoption.  A new provision allows withdrawals of up to $5,000 from retirement accounts for these expenses. 
  3. Traditional IRA contributions.  Previously, contributions to a Traditional IRA were prohibited once a taxpayer reached 70.5 years of age.  The new law removed that prohibition, so those still employed can contribute.
  4. Beginning date for RMDs.  The previous law required those turning 70.5 years of age to begin withdrawing from their Traditional IRAs.  The new law increases that age to 72.  It applies to anyone turning 70.5 after December 31, 2019.  Those who turned 70.5 on or before December 31, 2019, and thus have started taking RMDs, cannot stop their withdrawals.



Louise Googins, Newsletter Author, Principal
Karl Kuelthau, Principal
Michael Googins, Administrator
Kim Rankin, Accountant
Carson Bieber, Associate
Mckayla Johnson, UW-Madison Intern
Brady Peat, UW-Madison Intern
Mason Buss, UW-Madison Intern


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