Dear friends,as I begin this newsletter, over 4 million doses of vaccine were administered in the US in one day for the first time. This is an extraordinary achievement and one that certainly warrants optimism for a more normal life in the near future. The deaths of over 550,000,000 people, however, will continue to remind us of the humbleness humanity needs to maintain in the face of mother nature and other events beyond our control. Our team at Pegasus is always available to help you navigate the quickly moving financial landscape in the wake of these events and assist you with whatever tools and information we can provide.
By Rodd D. Berro
As per last quarter’s newsletter, yes, the markets continue to grind higher with promising vaccine news and another 1.9 Trillion dollars (with a “T”) of stimulus. The Dow Jones Industrial Average ended the quarter up 7.8% while the S&P 500 increased 5.8%, the Russell 2000 small cap index continued at its torrid pace rising 12.4% while the Nasdaq Composite finally came back to earth showing “only” a 2.8% gain. The bond market was the center of attention with both fears of inflation and the promise of 6 or 7 percent GDP growth fueling interest rates higher. The 10-year Treasury moved from .93% at the end of last year to 1.75% by March 31st and the 30-year ended at 2.63% from a December 1.65%. Gold dropped 9.5% for the quarter ending at $1,713.80 per ounce while oil rose 21.93% to $59.16 per barrel. Recapping the extraordinary fiscal and monetary response to the pandemic we have had government packages of $2.2 trillion, $900 billion and $1.9 trillion in addition to the $3 trillion expansion of the Federal Reserves balance sheet and we are probably going to have an additional package in the form of infrastructure spending of as much as another $2.25 trillion. This should keep inflation fears and GDP growth humming along, but who will be buying all this debt? One possible customer could come from overseas. In 2013 43% of the US debt was owned by foreign investors while now it is less than 30%. The Federal reserve maintained 12.5% of the US debt on their balance sheet in 2013, now it rests at 22%. If buyers cannot be found and the Federal Reserve decides not to take any more into their coffers, rates may continue to rise as they did in the first quarter until they are enticing enough for investors to buy. Time will tell if this tests the continual rise of the equity indexes.
The IRS has announced an extension to the 2020 tax filing deadline to May 17, 2021, for individual tax filing, income tax payments, and IRA contributions. NY, NJ, & CT have also extended the state personal income tax deadline to May 17th. Other state deadlines may be different, taxpayers should view their individual state tax agency website to confirm new deadlines. Estimated quarterly tax payments that were originally due on April 15, remain due on that date. To ensure time sensitive tax payments & IRA contribution requests are processed before the tax filing deadline, we encourage clients to submit requests to our office by May 1st.
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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pegasus Asset Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Pegasus Asset Management, Inc.. Please remember to contact Pegasus Asset Management, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Pegasus Asset Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of Pegasus Asset Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.