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The Weekly Wealth Report

April 26, 2021

The Week on Wall Street

The crosscurrents of strong corporate earnings, rising global cases of COVID-19, and the specter of higher capital gains taxes led to a choppy week of trading that left stock prices slightly lower for the week.

The Dow Jones Industrial Average lost 0.46%, while the S&P 500 slipped 0.13%. The Nasdaq Composite index fell 0.25% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.47%.


On April 26th each year, National Audubon Day honors the birth of John James Audubon (April 26, 1785 – January 27, 1851).

Audubon was a French-American ornithologist, naturalist, and painter noted for his extensive studies of American birds and his detailed illustrations of the birds in their natural habitats. Audubon’s greatest work was The Birds of America which is considered one of the finest ornithological works ever completed. His work in this book contains more than 700 North American bird species with 435 hand-colored, life-size prints of 497 bird species.

Spring is an excellent time to observe the birds John Audubon described and painted. As they migrate across the country, set out feeders to welcome them along their journey. Watch them from your window or while strolling on a path.

According to the U.S. Fish and Wildlife Service, at last count approximately 45 million people watch birds. They bird watch while they travel or all year long from their homes. Many trek around the country to see a bird for the first time in its natural habitat.



A Directionless Week

Despite continued better-than-expected corporate earnings, stocks retreated as concerns over rising global COVID-19 infections weighed on investor sentiment. A mid-week rally erased much of these losses, with reopening stocks and small cap companies leading the market.

The stock market resumed its decline in reaction to reports that President Biden supported a capital gains tax increase on wealthy Americans. The Biden news prompted worries that stocks could come under pressure this year if such an increase were to go into effect next year.

Solid economic reports, along with a reassessment of the capital gains news, helped stocks to bounce back and close out the week on a positive note.

Housing Shows Strength

Two housing market reports last week reflected strong consumer demand for homes.

Sales of new homes in March jumped by 20.7% from February and by more than 66% from last March, reaching levels not seen since 2006. All regions recorded double-digit gains, except for the West, which experienced a decline of 30%.

Though existing home sales fell 3.7%, it wasn’t for lack of consumer interest, as evidenced by the 18-day average to sell a home. The decline was largely an issue of tight inventories. This demand/supply imbalance drove median home prices higher by 17.2% from March 2020 to $329,100.


We all look forward to the day when we can finally kick back, relax, and collect our carefully planned and hard-earned retirement savings. But rushing into withdrawing your retirement funds without the best distribution method can prove costly. When you retire, some employers require the distribution of your 401(k) funds as soon as you separate from the company. In that case, rolling them over to an IRA may be your only option for avoiding penalties.

If a lump-sum distribution is your only option, that may bump you into a higher
tax bracket. Some employers, however, allow retirees to leave those funds in the
company’s 401(k) plan, even after they’ve separated from the firm. Given the option – leaving your money in the plan or rolling it into an IRA – which do you choose?

Remember, a 401(k) is like a traditional IRA. Anything contributed can
grow tax-deferred until the day you take distributions. You are still subject to
the plan’s rules and the investment options offered, though, including any
changes the employer may make to the plan after you retire. A rollover
may be more attractive, particularly if the 401(k) has limited investment

Rolling your 401(k) savings into an IRA allows you to continue investing
and growing your assets tax-deferred. It also gives you more control over
when and how to invest your money and, to some extent, when you take
distributions. If you have multiple qualified plans (for example, accounts at
several different employers), consolidating them into an IRA can make
them easier to manage.

The decision to leave your 401(k) or take a distribution depends on your
specific financial situation – namely, your expected tax bracket the year
you retire.

If you’ve been putting off the retirement planning question, there’s no time
like the present! Schedule some time with our office to get the conversation started.

As always, please let us know if there is anything we can help with along the way or any financial concerns you may have.

Have a great week!