March 12, 2020
www.KiperWA.com
With the increasing news and concern regarding the COVID-19 coronavirus, we want to ensure our clients we are monitoring the developing situation and have resources in place to provide you continued service in any type of contingency situation. We hope you and your loved ones remain safe and healthy.
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Market Madness
What Are Circuit Breakers?
Circuit breakers are measures approved by the  Securities and Exchange Commission  (SEC) to curb panic-selling on U.S. stock exchanges. They apply both to broad market indices such as the S&P 500 as well as to individual securities.
Circuit breakers halt trading on the nation's stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day. The circuit breakers are calculated daily.

Circuit breakers function by temporarily halting trading when prices hit predefined levels.
Circuit breakers
Level 1 halt (7%)
  • Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
  • At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.
Level 2 halt (13%)
  • Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
  • At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.
Level 3 halt (20%)
  • At any time during the trading day—trading shall halt for the remainder of the trading day.
The Butterfly Effect
Scott Minerd

If I had written a commentary on how 4,000 people dying from the flu would topple global financial markets, I think I would have been deemed insane. Yet today that is exactly the story.

After all, the World Health Organization estimates that influenza kills 290,000 to 650,000 people per year. How does this statistically small number of 4,000 versus a global population of 7 billion bring the market to its knees? I don’t think I have to explain that right now, but if anyone thinks I need to, feel free to reach out to me in a socially distant fashion once you have washed your hands for 20 seconds and then rinsed them in Purell.

Amazingly, the market is finally waking up to the prospects of not just viral contagion but also to financial contagion. The phenomenon of a relatively insignificant event cascading through an unpredictable series of circumstances resulting in a severe outcome has been referred to as the “butterfly effect.”

The concept is derived from how a seemingly insignificant phenomenon like a butterfly flapping its wings in Brazil leads to a hurricane on the other side of the globe.

Who could predict the exact chain of events set off by the coronavirus that leads us to the circumstances that we face today? Besides the public health and economic crisis, would anyone have considered that this would also turn into a geopolitical crisis? Russia is attempting to use this critical moment to its own advantage, and the collapse of the Russian-OPEC alliance—precipitated by Russia’s goal of killing off the U.S. shale industry—has turned into an all-out price war that is causing chaos in the energy markets.

Now the financial contagion is spreading rapidly into the credit markets where not only energy bonds are plunging but other sectors like airlines, lodging, and retail are sure to follow suit.

Then there is the knock-on effect to corporate earnings and cash flows across a broad swath of industries once the world enters a global recession which now appears to be inevitable. 
Tax Time and the 1099

They're the harbinger of tax season, the flurry of 1099's forms that start hitting your mailbox (and/or email inbox) in January and continue apace for the rest of the month and often beyond. When will you have them all? Do you have them all? Will they offer a corrected 1099?

As a service to many of our clients we work directly with their accountants, CPA's or tax person. We can alleviate some of the tax season drama by sending your tax documents directly to your dedicated tax person. We can also help answer questions that may arise from your tax documents. We are just a phone call away, give us a call and we can help.

Timing the 1099

Specifically, I am referring to the 1099 consolidated statement that usually includes 1099-B, 1099-DIV, and 1099-INT.

People commonly believe that all tax forms must be completed and sent to them by the end of each January. Actually, these specific 1099 forms have a deadline of February 15. The IRS grants all filers of these forms, including all other custodial firms, a 30-day extension so they have time to gather final data, so March 15th is the final deadline for custodians to mail their 1099's.

While this may seem a bit frustrating, I think it is important to make the following points.

IRS regulations designate the deadline to mail original 1099 tax statements as February 15, however, a limited number of 1099's will be mailed later. Accounts that may require a delayed 1099 include those that hold:

·        mutual funds pending reclassification; or
·        certain complex securities, including unit investment trusts, mortgage pool
securities, and real estate investment trusts.

These are mailed by March 15.

A byproduct of meeting the February 15 date but releasing incomplete information is that the custodian would be required to send corrected 1099s a few weeks after they sent you the originals. If you were an early tax filer, these corrected 1099's would often require you to file an amended tax return.

Although amended returns are typically not difficult to create, and are commonly filed, many taxpayers have had difficulty getting back on their tax preparers’ schedules to look at their corrected information and file amended returns. They are often delayed until after the filing deadline of April 15 because of the hectic nature of “tax season.”

Questions?

If you have any questions, please give me a call (502)380-9191, I will be happy to explain any of this in further detail.
Success with Riskalyze

The verdict is in, Riskalyze is a success! We have had tremendous response from our clients using Riskalyze. With Riskalyze we are able to help you:

  • Set portfolio return expectations using risk rather than average return.
  • Calculate the Risk Number® of each portfolio to match it with YOUR risk preference.
  • Calculate YOUR probability of success and build a map to YOUR success.
  • Stress test YOUR portfolio for a variety of stock and bond market scenarios
  • Retirement Map
Are you interested in learning YOUR true risk tolerance? Follow the link below to find your Risk Number.
  
*This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Find Your Financial Tranquility
Kiper Wealth Advisors
14300 Willow Grove Circle
Louisville, KY 40245
(502)380-9191
KIPER WEALTH ADVISORS ESTABLISHED 2003.

Kiper Wealth Advisors is a full service Financial Advisory firm, located in Louisville, KY.

 For over a decade we have been helping families and small businesses organize, simplify and achieve their financial goals.  

Kiper Wealth Advisors is proud to be locally owned and operated.   

Securities offered through Parkland Securities LLC member FINRA/SIPC 
Advisory services offered through Sigma Planning Corporation, a Registered Investment Advisor 
Kiper Wealth Advisors is independent from Parkland Securities LLC and Sigma Planning Corp