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The RFG Weekly Wealth Report

August 10, 2020

The Week on Wall Street

Overlooking stalled efforts by Congress to pass a new fiscal stimulus bill, stocks marched higher last week with the Dow Jones Industrials leading the way and the NASDAQ Composite setting multiple fresh record highs.


The Smithsonian Institute, established on August 10, 1846, was funded by British Scientist James Smithson. Smithson's estate totaled roughly half a million dollars and was given to the U.S. as a gift for future funding for the institute campuses project. After 170 years, many continue to speculate on Smithson's estate plan's motivation, having never set foot on America's soil. His gift has significantly impacted the arts, humanities, and sciences in the U.S.


The Dow Jones Industrial Average gained 3.80%, while the S&P 500 index rose by 2.45%. The Nasdaq Composite Index climbed 2.47% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.31%.

Earnings Season Winds Down

A string of encouraging news reports, including a decline in new COVID-19 cases nationwide, pushed stock prices higher throughout the week.

Stocks also rallied on signs of a pick-up in manufacturing activity, factory orders that came in well above estimates, and new jobless claims reporting beating expectations. But it wasn't enough to slow the daily climb in the equity markets, with the NASDAQ Composite index closing above 11,000 for the first time, while the S&P 500 index closed in on its record high set in February of this year.

Stocks drifted on Friday even though the employment report showed that employers added 1.8 million jobs in July, lowering the unemployment rate to 10.2%.

One Eye on Bonds, Gold

The continued rally in stock prices suggests that the U.S. economy may maintain its recovery through the second half of the year and 2021. But the bond market and gold prices suggest a different outlook.

Last week, Treasury yields hit record lows since early March, indicating that investors may be less convinced about economic prospects. Meanwhile, gold traded over $2,000 per ounce.

While the rise in gold prices this year has been propelled mainly by historically low-interest rates, its reputation as a store of value has attracted investors worried about stock market volatility and a potential uptick in inflation.

Final Thoughts

New reports were released last week that the U.S. and China agreed to meet by video conference on August 15 to discuss compliance with the terms of the Phase One trade deal.

With tensions running high between the two nations, expect Wall Street to keep a close eye on any developments that may appear connected to the virtual meeting.


Why You Should Add Beneficiaries to Your Investment Accounts Now

How you can help save your heirs time, money, and energy when they need it most.

Losing a loved one isn't just an emotional burden — it also carries an administrative load. There are flower arrangements to pick, eulogies to write, and a stream of paperwork to sort through.

You can reduce that load for your heirs by communicating your preferences about your assets. Part of that means adding beneficiaries to your retirement and investment accounts. Doing so will help save your heirs time, money, and energy when they need it most. Here's why.

More for your beneficiaries

If you already have beneficiaries appointed for your investment or retirement accounts, the assets will pass. If not, they may have to go through probate, a legal process for settling an estate after someone dies.

Probate often involves going to a state court, which is the last thing your beneficiaries will want to worry about during a busy and challenging time. A typical probate case can last a year or longer, during which your heirs cannot access their inheritance. Probate also means costs that can easily consume 0.5% to 5% of your estate.

Stress reliever for your heirs

Taking care of this simple step can ease the heavy burden from your beneficiaries, so they do not have to worry about untangling your finances during the grieving process.

Part of your financial plan needs to involve some legacy planning, and having your estate plan reflect your last wishes. Your account provider will contact your beneficiaries as soon as they are notified of your passing, saving heirs from locating accounts.

The beneficiary will need to provide documentation; a copy of the death certificate is a good option since it is low-cost and typically received within 30 - 45 days.

Overriding your will

If you have beneficiaries listed, those elections will typically override your will.

Keeping your beneficiaries current is extremely important. If you have remarried, it is important that you update your beneficiary elections as soon as possible. If overlooked, outdated elections could potentially put your assets at risk of going to your previous spouse - even if your will states otherwise.

Quick and painless process

Retirement account and investment account beneficiaries are different, but it's easy to assign beneficiaries for both types of accounts.

If you have a retirement account, you may have had the option to assign your beneficiaries when establishing your account and to make changes anytime. If you have a regular investment account, you'll need to request a transfer on death form to make beneficiary elections. You can also request TOD forms for bank accounts.

If you have a trust, you don't have to worry about selecting beneficiaries, because, by their very nature, trusts already have a clear, named beneficiary. So trusts allow their holders to avoid the possibility of probate altogether.

Recent life changes

After a significant life event, like getting married or having a child, it's important to update or add beneficiary elections. No one likes to think about an unexpected death — especially right after a happy event — but it can happen, so it's best to prepare in advance.

For some of us, estate planning can become very complicated and overwhelming. An estate planning attorney may help alleviate some of the pressure and guide you through the planning process.

As always, please contact my office with any questions or financial concerns you may have.

Have a great week!