July 2021 Newsletter
July, 2021
*Semi-Annual Report from GTS*
This month’s Market Snapshot is an abbreviated version. During the month of July, GTS clients will receive their semi-annual report which will dive deeper into how their portfolios have performed so far in 2021 as well as some additional information about the markets.
Stocks Rally
Rising conviction in the economic recovery and waning inflation worries drove stock prices higher, with the S&P 500 and Nasdaq Composite racing to record closes to begin the week of June 28th.
Amid the week-long march higher, market leadership changed hands throughout the five-trading days. The leadership baton alternated between the technology and high-growth companies, which responded to lower bond yields, and cyclical stocks, which rallied on higher oil prices and successful bank stress tests.
Economic news buoyed investor sentiment as consumer confidence rose and an improving labor market—weekly initial jobless claims came in at a pandemic-era low (364,000), while employers added 850,000 new jobs in June—sent the S&P 500 and Nasdaq Composite to new record highs to close out the week.1,2
A Confident Consumer
Market sentiment was lifted by a rise in The Conference Board’s Consumer Confidence Index, which reached its highest level since the onset of the pandemic in March 2020. This was the fourth-straight month of increases in consumer-confidence levels.3
The consumer outlook for income, business, and labor market conditions over the short-term improved markedly. Interestingly, consumer confidence and buying intentions appear largely unaffected by the possibility of rising inflation. In fact, the survey showed a rise in the number of consumers expecting to purchase homes, automobiles, or home appliances. Vacation intentions also rose.3
Mid-Year Financial Checkup
With June officially behind us, it’s time to face the facts: we’re headed toward the second half of 2021. While there’s still plenty of time to enjoy the rest of summer, we encourage you to slow down and check up on your financial well-being.
Take some time to evaluate your financial standings as we prepare for the second half of the year. Remember, we’re always here if you need assistance reassessing or working towards your financial goals.
Review your budget:
Your spending habits likely look different now than they did in 2020, but did you adjust your yearly budget accordingly? The second half of the year can be expensive, between the holiday season and back-to-school spending. Take some time now to prepare.
Check your credit score:
If you plan on moving, purchasing a car, or taking out a personal loan this year, you’ll want your credit score in good shape. Your score could have been impacted by recently accrued debt, late payments, hard credit inquiries, identity theft, and more. We also advise you check your credit report for any inaccuracies. You can do this for free through www.annualcreditreport.com
Prepare for the advance child tax credits:
If you have children under 17, this is big news! If you qualify, based on your income, you may begin receiving advance child tax credits in July.
For 2021, the Child Tax Credit provides a credit of up to4:
- $3,600 per child under age 6
- $3,000 per child from ages 6 to 17.
Rather than getting the credit at tax time, a portion will also be sent monthly throughout the year starting in July.
Other dependents—including children aged 18 and full-time college students ages 19–24—can receive a nonrefundable credit of up to $500 each.
Families who qualify, based on income, are expected to receive six installments via direct deposit or mailed check. If you anticipate getting the credit, you may want to talk about smart ways to use the money, such as saving in a 529 college plan.
Potential Pitfall!
However, there are some potential tax issues to be aware of! If you tend to owe a small amount of taxes at tax time, you may end up owing a little more. Likewise, if you normally get a small refund, that refund may decrease. This is because a portion of the credit you would normally claim at tax time is being sent to you in advance.
For example, let's say you have one child under the age of 6. Under previous tax law, you would claim a $2,000 credit at tax time. However, in 2021, you are eligible for $3,600. You'll be receiving $300 a month for 6 months, $1,800 total. At tax time, that only leaves $1,800 of credit to use for your tax return when you were used to getting $2,000. There is $200 less in credits for you at tax time which will impact how much you owe or are getting in a refund. The more children you have, the greater this amplifies the potential issue.
If you'd like to calculate your potential credit or read more on the topic, here is a helpful website - Child Tax Credit 2021: Advance FAQs & Calculator.Please call us if you have any questions.
Increasing Cognitive Function: Can Exercise Help?
Most of us understand that moving our bodies is a necessary component of taking care of our health. It helps us sleep better, manage stress, maintain a healthy body weight, keeps our muscles strong (especially as we age) and helps us mitigate chronic disease. Additionally, exercise may help boost cognitive function.
Moderate-intensity exercise can help improve your thinking and memory in just six months, states a February 15, 2021, article in the Harvard Health Publishing at Harvard Medical School. "There's a lot of science behind this," says Dr. Scott McGinnis, an instructor in neurology at Harvard Medical School.
Since each of our bodies is unique, science has yet to pinpoint exactly the type of exercise best for increasing cognitive function. However, it suggests that regular exercise which gets your heart pumping and involves learning new skills or movement patterns, such as tai chi, shows promise.
Click this link to read the full Harvard Medical School article: Exercise Can Boost Your Memory and Thinking Skills
Bonus Article: A Neuroscientist Explains Exactly How Awesome Exercise Is for Your Brain
"Is Success Luck or Hard Work?"
The answer may surprise you!
During the COVID lockdown, a headline went viral. A portion of parents thought they did most of the homeschooling, yet only 3% of their partners agreed. What caused this major disconnect?
What is egocentric bias and how does your brain play tricks on you?
What does the month of January have to do with NHL players?
After watching this short video, your view of the world around you may change: