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SHRED DAY

PLEASE JOIN US FOR OUR ANNUAL SHRED DAY

When: Saturday, October 1st

Time: 9am- Noon

Where: DunlapGill Wealth Management Group Parking Lot at

14074 Trade Center Dr., Ste 110 Fishers,  IN  46038

What do I keep? What do I shred? Please visit our website at www.dunlapgill.com and look under “Tools” tab for Record Retention Guidelines.

For more information please contact Dawn Doty at 317-770-2266

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Midyear Outlook 2020

We are at the midpoint of 2020, and it would be an understatement to say it’s been a challenging year so far in the United States and around the world. We’ve faced health, social, and economic crises that continue to impact our communities and our economy.

That’s why we’re looking ahead for new ways to face these challenges together and to prepare now for better times. LPL Research’s Midyear Outlook 2020: The Trail to Recovery charts a path forward.

At LPL Research, we know the stock market is forward-looking: It focuses on what’s happening today and what it sees on the path ahead. Much of the real-time economic data we follow—such as transportation activity, home sales, and jobless claims—is showing tangible evidence that economic activity—while still depressed—has begun to make a comeback. The path of the economic recovery remains uncertain, but based on the deep impact and multi-staged recovery, we expect a 3–5% contraction in gross domestic product in 2020.

Already stocks are pricing in a steady economic recovery beyond 2020 that may be supported if we receive breakthrough treatments to end the COVID-19 pandemic. Our 2020 year-end S&P 500 Index target range is 3,250–3,300, based on a price-to-earnings ratio (PE) of just below 20 and a normalized earnings per share (EPS) number of $165. However, the optimism we see in the S&P 500 Index now may limit the size of the gains over the rest of the year.

Turning to the bond market, we expect interest rates to head higher over the rest of 2020 but remain near historically low levels, with a year-end forecast of 1–1.5% on the 10-year US Treasury yield. If realized, this would be the lowest interest-rate level on record to end a year.

It’s still going to be a challenging environment with significant uncertainty that may lead to more volatility for the next few months, especially with the highly anticipated presidential election in November. We continue to encourage investors to focus on the fundamental drivers of investment returns and their long-term financial goals.

LPL Research’s Midyear Outlook 2020 provides our updated views of the pillars for investing—the economy, bonds, and stocks. As the headlines change daily, we encourage you to continue to look to these pillars as trail markers on your investment journey, and to the Midyear Outlook 2020 to help provide perspective on facing these challenges now and preparing to move forward together

https://www.lpl.com/news-media/research-insights/lpl-financial-research-midyear-outlook-2020.html?icid=M00322

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. The economic forecasts may not develop as predicted. Please read the full Midyear Outlook 2020: The Trail to Recovery publication for additional description and disclosure. This research material has been prepared by LPL Financial LLC.

 

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Next Phase of Recovery

Moving to the Next Phase on the Road to Recovery

Posted by lplresearch

Market Blog

The US economy has made impressive progress in recent weeks. As the economy re-opens, the way we assess the recovery has changed. In March and April, we were looking for evidence that growth in COVID-19 cases was decelerating—which thankfully it did—along with evidence that a recession was priced into stocks and that stimulus measures were sufficient to get us through the crisis. We used our Road to Recovery Playbook, shown below, to help us determine how the market was progressing in its bottoming process.

Using this framework, stocks are clearly no longer pricing in a recession (#3); in fact, the recession in the United States is probably already over, and stocks are trading at their highest next 12 month’s price-to-earnings ratios (PE) since the tech bubble 20 years ago. In addition, we no longer have widespread investor pessimism that could potentially translate into outsized gains (signal #4).

But we do think we know what the COVID-19 peak looks like (signal #1), though we acknowledge the crisis isn’t over. We have also seen how deep the recession is (signal #2), while the policy response has been massive and sufficient to enable the recovery (signal #5).

View enlarged chart.

“We are encouraged by recent progress in reopening the economy, but it’s been low-hanging fruit,” according to LPL Equity Strategist Jeffrey Buchbinder. “As the pace of the economic comeback eventually slows in the second half, investors may stop celebrating strong growth rates and turn their focus to the shortfalls versus pre-pandemic activity, which could create a tougher path for stocks.”

So what now? As we wait for stocks to digest these strong gains over the past three months, we need new tools to gauge the next phase of the recovery. We gave you a taste of those new tools here last week, which include some of the timeliest, high-frequency data to assess the economic reopening.

For stocks to move much higher from here, we believe we will need continued steady improvement in economic activity in the daily and weekly data. In such a dynamic and uncertain economy, most monthly and quarterly economic reports are stale by the time they are released. Look for more updates on these timely data points in the weeks ahead.

For more on the reopening, please listen to our latest LPL Market Signals podcast here.

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share.  It is a financial ratio used for valuation:  A higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use | Tracking # 1-05025254

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Factors for Recovery

Road to Recovery Playbook Factor #1: Peak COVID-19 Cases

Market Blog

As COVID-19-related fear continues grip global financial markets, we wanted to take a closer look at factor #1 in our Road to Recovery Playbook: confidence in the timing of a peak of new COVID-19 cases in the United States.

This is probably the most difficult signal in the playbook to call with any degree of certainty. We can look to data from countries that were affected earlier for clues, but many country-specific factors contribute to the outcomes, e.g., societal norms (such as greeting with a kiss in Italy), population density, age distributions, prevalence of preexisting health conditions, smoking rates, air pollution, availability of testing equipment and criteria for administering tests, the compositions of economies, severity and speed of local governments’ containment measures, and even weather.

The good news is that despite the wide range of factors, the number of COVID-19 cases so far has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline. The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of the tunnel.

The bad news is that countries now in the midst of outbreaks, including the United States, remain on the upward slope of the curve where the modified human behaviors predicted by Farr’s law, including social distancing, lockdowns, and treating the sick, have either yet to be fully implemented or have yet to take effect. Italy and Iran had the first outbreaks outside of Southeast Asia and appear to be further along in the curve than Spain, France, Germany, the UK, and the US. Growth of new cases in the US may be beginning to stabilize, after hitting what may or may not have been a peak on March 20. We must consider that the tougher containment measures implemented in many states may not have had enough time for the desired impacts.

As shown in the LPL Chart of the day, the S&P 500 Index has continued to drop as the daily numbers of new COVID-19 cases in the US has grown (note that the scale of the S&P 500 line in the chart has been inverted).

View expanded chart.

“While markets clearly reflect a lot of fear right now, we have reason to believe the improving patterns of infection seen in China and South Korea will be repeated in the other countries that now find themselves with major outbreaks,” said LPL Financial Senior Market Strategist Ryan Detrick. “While the nearly unprecedented level of volatility we are experiencing in stocks is historic, there is some light at the end of the tunnel.”

We will get through this and the market will find its bottom.  We have no doubt. The US economy came into this crisis on a strong footing, which should help it weather the storm. The fiscal response will reportedly be massive and unprecedented, which should help preserve jobs and position the US economy for a stronger recovery on the other side of this. We think long-term investors may be rewarded for sticking with their target allocations through this crisis and would recommend staying the course.  There may be emerging opportunities for suitable investors to consider opportunistically – but thoughtfully and carefully – adding some risk to portfolios in the weeks ahead.

Stay safe everyone.

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

If your representative is located at a bank or credit union,  please note that the bank/credit union is not registered as a broker-dealer or investment advisor.  Registered representatives of LPL may also be employees of the bank/credit union.

These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union.  Securities and insurance offered through LPL or its affiliates are:

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking 1-970330

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LPL’s Factor #1 in Recovery

 

Road to Recovery Playbook Factor #1: COVID-19 Case Update

Posted by lplresearch

Market Blog

Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States.  At LPL Research we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the LPL Chart of the Day, while the number of new cases in the United States has continued to climb, the number of new cases seen outside of the US has begun to drop in recent days. In fact, Italy, the worst-hit country in terms of total deaths from the virus, reported on Tuesday that new cases hit a two-week low.

View enlarged chart.

This data is important because thus far the number of COVID-19 cases has conformed to Farr’s Law of Epidemics, exhibiting a somewhat predictable bell curve normal-like distribution. Formulated in the 1800s by British epidemiologist Dr. William Farr, these laws predict that epidemics normally follow a pattern of sharp increase, a peak, and then a decline back to a baseline.

The distributions of both new COVID-19 cases and related fatalities in China and South Korea have exhibited this behavior and appear to have ridden out the initial outbreak cycle. The City of Wuhan, China, which was the initial epicenter for the virus, reported on March 19 that it had zero new cases—showing us that the curve can be flattened and there is light at the end of this dark tunnel.

“The market’s bounce last week may have been in anticipation of some of these more positive data points regarding the virus,” said LPL Financial Senior Market Strategist Ryan Detrick. “While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States. Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching.”

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

If your representative is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor.  Registered representatives of LPL may also be employees of the bank/credit union.

These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union.  Securities and insurance offered through LPL or its affiliates are:

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

 

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Some Good News

Greetings Client Family and Friends.   We pray you are all well.

We have some good news for you!   The IRS says you have until July 15 to make 2019 IRA and HSA contributions.

Additionally they are waiving the IRA required minimum distribution (RMD) for 2020.

We encourage you to take advantage of these changes.  If you’d like to discuss this further please contact us.

Best wishes and blessings to you all!