Broker Check

The RFG Weekly Wealth Report

July 20, 2020

The Week on Wall Street

Stocks were mixed last week as investors reacted to positive economic data, progress on a COVID-19 vaccine, and the continued nationwide increase in COVID-19 cases.


The National Association of Baseball Players was established in 1858, and the first All-Star game between Brooklyn-New York happened that same year. The match was the first to document an admission fee (50 cents) to the estimated 4,000 fans in attendance for the series opener.


The Dow Jones Industrial Average had 2.29% gains last week, while the S&P 500 rose by 1.25%, compared to the Nasdaq Composite Index 1.08% losses for the week.

The mega-cap technology companies saw some profit-taking last week, sending the Nasdaq Composite to its first loss in three weeks. The MSCI EAFE Index, which tracks developed stock markets overseas, ended 2.19% higher.

Stocks Find a Way Higher

After a Monday rally melted away on news that California was rolling back its reopening plans amid rising infections, a new earnings season began on a hopeful note. Stocks posted back-to-back daily gains on the strength of positive earnings surprises from a few money center banks and encouraging news about progress in the COVID-19 vaccine development.

Despite a healthy retail sales number, new jobless claims and rising U.S.-China tensions reminded investors that global economic recovery remains fragile, leading stocks to pare some of the week’s earlier gains.

Earnings Season Begins

While investors long ago accepted the idea that this earnings season would be ugly, reflecting the economic shock due to COVID-19, it did not mean that there was an absence of relevant insights to be gained from this quarter’s earnings reports.

Last week, three money center banks kicked off the earnings season, reporting substantial declines in profits and an additional cumulative $28 billion set aside for loan-loss reserves. Banks are an essential economic bellwether since they touch every part of the U.S. economy.

Although their earnings were significantly lower, they beat consensus Wall Street estimates, which encouraged investors and set the stage for stocks to move higher. However, the story on this quarter’s earnings season is far from finished as investors await the stream of companies releasing their quarterly results in the days and weeks ahead.


Nearing retirement? Retire by design, not default.

For many individuals nearing retirement, a portion may plan an early exit from the workforce, while others may consider delaying theirs until after the new milestone age of 66. If you are about five years away from retirement, it may be time to do some specific thinking about what your life in retirement will look like and funding for it.

Designing your retirement plan

Planning for retirement is a highly personalized experience, as each individual's lifestyle undergoes a unique transformation. Developing a retirement plan will require careful attention to your current assets and how they will sustain as invaluable funding during your retirement.

Rather than focusing on how to accumulate more assets, redirect your attention on how to better use your assets wisely, with the goal that they will last through your retirement. Take time to look at your current expense allocations and determine which will remain fixed and which will change when you retire.

Lifestyle planning and beyond

Beyond lifestyle factors, there are day-to-day investment considerations. If you have a pension plan, you will need to calculate the monthly benefits it will provide. If you have a 401(k), you will probably base many decisions on how much cash flow you can generate from those investments without running out of money.

Consider your spending goals while also taking into account other activities you enjoy: travel, hobbies, and other activities that fall within the specific lifestyle you plan for retirement. Establishing a comprehensive spending budget is central to creating a sound retirement lifestyle plan. Armed with this knowledge, you will be able to make better and more informed decisions on your timeline to retirement and realistic figure of your income needs.

A retirement strategy is unique for every individual. If you plan to or are currently working with a financial advisor, it is imperative that you have open and honest discussions with your advisor to identify your assets, spending needs, and ultimately, your retirement goals.