Message from Jon

Opinion

Why Gold...Now that 2020 is almost over?

Many of you might be asking yourselves why we are continuing to hold gold in many of our portfolios. Especially now that 2020 is nearly over and the fear index is hovering near 20.

We have no real fear in the short term about inflation either, so at this point, is there even a real advantage to our gold position at all?

Here is our opinion on the Fundamentals of Gold at present...

The US dollar continues to weaken. The dollar is down 7% in the last 12 months and more than 10% from its March high. The dollar did flatten in August and held tightly in a range between 92-94. During this stability, gold weakened. Since December, the dollar has broken through the 92 floor and is again trending lower. This is positive for gold prices as a weaker dollar = higher gold.
Gold does very well in periods of negative interest rates as short-term bonds and cash carry negative real returns. As the economy recovers and the fed holds rates low, the gap of negative yields will expand, and this is very bullish for gold. In the last month the negative yield has blown out to a new high after being flat from August-November.
The delay in stimulus spending by the federal government caused gold to pause, but we are about to embark on a renewed stimulus push with the likelihood of a bill in the $700-1,000 billion range in the next few weeks, as well as a much larger package next year. Deficits should widen and the Fed will be forced to monetize this spending by flooding the system with money.
Institutional asset allocations to gold is near historic lows, last seen in the late 1990's. As pension funds enter their annual allocation reviews over the next few weeks, it's highly likely they see these same charts & data we do and increase their allocations. Even a shift of 1-2 basis points from institutional asset allocation models would overwhelm supply and force prices up materially.

The bottom line is, we think we are in the early innings of a multiyear run in gold prices. It is also notable that most gold miners continue to reflect future gold prices of $1,500-$1,600 per troy ounce, despite the fact that the current price is $1,800. If gold prices hold at current levels or rise as I expect them to, valuations for miners will ultimately rerate and close this wide valuation gap.

Till we speak again, enjoy your week!

Jon

Is Stimulus Near?

WEEKLY UPDATE - December 7, 2020

In This Issue

The Week on Wall Street

Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package. The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor's 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.[1][2][3]

A Record Week for Stocks

After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.

A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges.[4]

A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes.[5]

The Start of Holiday Shopping

The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year's levels.[6]

However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October.[7]

Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year's levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.[8]

THIS WEEK: KEY ECONOMIC DATA

Wednesday: Gross Domestic Product (GDP), Job Openings and Labor Turnover Survey (JOLTS).

Thursday: Consumer Price Index (CPI), Jobless Claims.

Friday: Consumer Sentiment.

Source: Econoday, December 4, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THIS WEEK: COMPANIES REPORTING EARNINGS

Monday: Coupa Software (COUP)

Tuesday: Autozone (AZO), Mongodb, Inc. (MDB), Chewy, Inc. (CHWY)

Wednesday: Campbell Soup Company (CPB), Slack Technologies (WORK)

Thursday: Lululemon Athletica, Inc. (LULU), Adobe, Inc. (ADBE), Broadcom (AVGO), Costco Wholesale Corp. (COST)

Source: Zacks, December 4, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Fountain Pen

"It is wonderful what we can do if we are always doing."

- George Washington

Fork and Knife

Holiday Crinkle Cookies

40 cookies

Ingredients:

1 cup unsweetened cocoa powder
2 cups sugar
½ cup vegetable oil
4 eggs
2 teaspoons vanilla extract
2 cups flower
2 teaspoons baking powder
½ teaspoon salt
½ cup confectioner's sugar

Directions:

Mix together the cocoa, granulated sugar, and vegetable oil.
Beat in the eggs one at a time. Slowly stir in the vanilla.
In a separate bowl, mix together the flour, baking powder, and salt.
Stir in the cocoa mixture and combine.
Cover the dough and refrigerate for at least 4 hours. This helps get the crinkles in the cookies.
Once the dough is chilled, preheat the oven to 350 degrees.
Coat each cookie ball in confectioner's sugar and place on a parchment paper-lined baking sheet.
Bake for 10-12 minutes.

Recipe adapted from Food52[9]

Document

Paying Employment Taxes? Make Sure You're Using the Correct Form

If you're a small business owner, you should understand the differences between two commonly used employment tax returns.

Form 944, Employer's Annual Federal Tax Return, is designed for small business owners to pay employment taxes once a year instead of quarterly. Business owners may receive a notice from the IRS informing them that they can file Form 944. Business owners may have to file this form every year until the IRS notifies them differently.

Form 941, Employer's Quarterly Federal Tax Return is a form designed for employers to report income taxes, Social Security, or Medicare tax withheld from employee's paychecks. Again, the IRS may inform business owners of whether they should use Form 941.

If you have questions about which form you should use, please contact our office. We may be able to provide some guidance or help you find some information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS[10]

Golfer

Mentally Practice Saying "Do" not "Don't"

When many golfers are teeing up for their shot, they spend so much time thinking about what they don't want to happen ("don't go in the water," "don't go in that bunker," etc.). One golf tip you can practice is saying what you want the ball to do instead. This is called mental imagery.

This practice can help you think positively and you may be surprised at how often you can hit where you imagine. While lining up for your shot, create a clear picture in your mind of where you want the ball to go, rather than where you don't want it to go!

Tip adapted from John F. Murray[11]

Medical Cross

Have a Healthier Holiday

The holidays are known for rich meals and lots of sweet goodies. But, that doesn't mean that you can't stay healthy! Here are some tips to help you have a healthier holiday, while still enjoying this special time of year:

Choose your splurges. Enjoy things you can only have once a year and save your stomach for those.
Don't skip meals. If you do, you might be even hungrier later and overeat.
Don't feel guilty. This is probably the most important wellness tip this season. If you do overindulge, don't beat yourself up over it. Try to do better next time and just focus on having a relaxing holiday!

Tip adapted from Mayo Clinic[12]

Leaf

Beautiful Eco-Friendly Wreaths

If you're starting your holiday shopping already, you might be wondering how you can make your shopping trips a little greener. Here are some eco-friendly shopping tips!

When possible, shop secondhand. Some people might view secondhand gifts as taboo, but they're just as thoughtful, if not more so, than new items because they are unique in their own way.
Shop local and shop small. Small businesses that are conscious of their environmental footprint are helping to do their part to create a more sustainable shopping landscape.
When shopping for clothes, look for items that are made from sustainable materials, such as cotton. Polyester is made from plastic and is non-biodegradable.

Share the Wealth of Knowledge!

Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,

Broker dealer or Investment Advisor and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial professional for further information.

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

[1] The Wall Street Journal, December 4, 2020

[2] The Wall Street Journal, December 4, 2020

[3] The Wall Street Journal, December 4, 2020

[4] The Wall Street Journal, December 3, 2020

[5] CNBC, December 4, 2020

[6] CNBC, November 30, 2020

[7] CNBC, November 30, 2020

[8] CNBC, December 1, 2020

[9] Food52.com, December 4, 2020

[10] IRS.gov, December 17, 2019

[11] Johnfmurray.com, December 4, 2020

[12] Newsnetwork.mayoclinic.org, December 4, 2020

[13] Biofriendlyplanet.com, December 4, 2020

Summit Financial Group
Summit Financial Group of Indiana
4050 Britt Farm Dr
Suite C
Lafayette, IN 47905
866-582-5721
jon@summit-fp.com
http://www.summitfinancialgroupofindiana.com

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Message from Jon

Is Stimulus Near?

WEEKLY UPDATE - December 7, 2020

Phase 1 – Where You Are

Phase 2 – Your Retirement Planning Needs

Phase 3 – Finalizing Goals and Details

Phase 4 – Putting Your Retirement Investments into Action

Phase 5 – Keeping Your Plan Effective into the Future