Wow, we can’t believe it is the last quarter of the year. 2021 seemed to fly much faster than 2020. The pandemic has warped time in many ways.

We have a few updates for you.

Tax and Estate Legislation

You may be hearing rumblings of the new estate and tax legislation making it through the sausage producing machine in Washington. Both parties of Congress have a notorious habit of passing massive tax legislation late in the year making the holidays a bit less joyful for financial planners and accountants.

We are paying very close attention and will be ready for whatever they throw our way. Carolyn loves tax planning much better than her previous career which usually involved working in the emergency department Christmas or New Year’s Eve.

It is impossible to know what will actually end up in the law as there tends to be a lot of horse trading up to the last minute. So far, both the estate and tax planning provisions being floated in the current version will affect very few clients significantly. We have contacted the clients who may be affected and are helping them prepare as much as possible.

Everyone else – stay tuned!

Updated Office Schedule

When the numbers spiked from the Delta variant, we went back to remote meetings and having only two of us in the office each day. Now that new COVID cases are going down, starting October 18th, we will resume having three of us in the office and everyone in the office during client meetings.

All of Life Planning Partners' employees are vaccinated. With the reduction in cases, we are comfortable meeting without masks if you are vaccinated and feeling fine. Please let us know if you we should wear masks because of your level of comfort or vaccination status – we don’t need to know the reason! If you are not vaccinated, we would prefer to wear masks.

The situation with the pandemic is very fluid. If cases rise again, we may revert back to a reduced presence in the office. Long term, we plan to have a hybrid model of working some from home and some in the office.

We are happy to answer your questions and concerns.

Thanks as always for your support and please share ways we can improve our service or communication. 

The LPP Team
The Market Update by Tim

U.S. stocks were relatively flat in the third quarter, but the year-to-date return for the S&P 500 Index was a very healthy 15.9%. The market dip in September finally ended a seven-month streak of positive returns for the market.

On the other hand, the bond market has been weak, posting a drop of 1.6% for the first nine months of the year. It’s a small decline, but still notable for bonds: according to research by MFS Investment Management, the worst annual return for bonds over the last 45 years was a loss of just 2.92%.

The influence of the Federal Reserve (Fed) on markets is difficult to measure, but most would say it’s not insignificant. Since mid-2020, monthly bond purchases by the Fed have been running at $120 billion (yes, with a “b”), including both Treasury and mortgage-backed bonds. According to data by Bernstein Advisors, Fed ownership amounts to an astounding 54% of the Treasury market for bonds in the 10 to 20-year maturity range. This “quantitative easing” is intended to hasten the economic recovery, but it’s hard to argue that all of the consequences of this intervention are positive (inflated home prices for a first-time home buyer, as just one example).

The Fed has been signaling that it will begin to scale back asset purchases by year-end, and there has been little reaction from investment markets thus far. Nevertheless, the longer-term impact due to a shift away from an “easy money” environment remains unknown. In the philosophical words of Aaron Rodgers, it all remains “a beautiful mystery.”

All of this continues to support the argument for diversification. We don’t know what we don’t know! Exposure to stocks is needed to improve long-term returns. Bonds are the safety net for when the stock market isn’t doing so hot and they support your cash flow needs. We know that diversification isn’t exciting but it works. And we hope the financial peace it brings is well worth the lack of excitement! 
Life Planning Partners, Inc.
904.448.5158