Kane Financial Update – June 1st, 2020

3 Minute Read

Good morning,

I hope this email finds you and your families well. CNY has officially entered phase two reopening which means Kane Financial can begin in-person client meetings! 

The state health department has provided required guidelines to businesses that are reopening, which thanks to Lyndsey’s hard work, have been 100% implemented at our office.  We are taking every safety measure and precaution necessary so that our clients can feel comfortable coming to our office for meetings.

In terms of the markets, our economy, and general financial planning, here is a brief list of recent FAQs:

How are the markets doing?
Following the fastest stock decline in our history (34% in just under a month), markets have rallied by 36% from March lows, all while some of the worst news was coming out.  The downturn provided several excellent buying opportunities within client accounts.

Will the Stock Market go back down?
It could, and if it does, we will again add to long equity positions in client portfolios.  That said, this rally has been very encouraging.  Markets are forward looking economic indicators, taking in current known information, and projecting what our economy will look like 6-9 months down the road.  We do not quite know the extent of economic damage the shutdowns have caused, and that unknown is still hanging out there for markets to digest.

What else should we be thinking about for the rest of 2020?

  • Required minimum distributions from pre-tax IRAs have been moved to age 72, and suspended for 2020.
  • Charity donations up to $300 have been added as a top line deduction for tax purposes for 2020.
  • The SECURE Act passed in late 2019 making Roth IRAs even more attractive.
  • Kane Financial now offers tax planning for clients (no extra cost) and can run tax scenario analysis for 2020.
  • If you have earned income, you can continue IRA contributions past age 70.5.
  • Your stimulus check is not taxable, it is essentially a tax credit.
  • IRA contributions for 2019 can be made up until July 15th, 2020.
  • For small business owners, ask your accountant about tax planning for 2020 as there have been numerous extension, deferment, and forgiveness programs that became available during the pandemic.

Finally, since we can meet with clients once again we would love to set up a review meeting with you.  After the market volatility we have experienced, now could be a great time to re-evaluate risk tolerance and portfolio allocations. 

Please feel free to schedule a meeting using the link on our website, it goes directly to my calendar where you can indicate the type of meeting, and the date/time that is most convenient for you.

I look forward to hearing from you, if you have any questions or concerns at all, please do not hesitate to contact the office.


Kane Financial Update – April 5th, 2020

3 Minute Read

I hope this email finds you well.  I wanted to send along a brief update with some business information, and the recent stimulus program approved by congress.

Kane Financial continues to be fully operational, with our usual hours of 8am – 5pm Monday through Friday, and Saturday 8am – 1pm.  We are continuing to meet with clients regularly, and encourage you to schedule a meeting at your convenience, either just to catch up and go through some questions, or go through a comprehensive client review meeting.

We have moved all in-person meetings to phone and video conference for the month of April.  The link below goes directly to my calendar, where you can schedule a meeting and indicate if you would like to speak over the phone, Google Meet, or Zoom Video Conference.

Click Here to Schedule a Meeting

As for the stimulus package recently approved, here is a high level overview of what we know so far:

Stimulus Checks
Expect a check direct deposited or in the mail from the US treasury in the coming month.  The $1,200 amount for single taxpayers starts to phase out at $75,000 of adjusted gross income, and the $2,400 amount for married taxpayers begins to phase out at $150,000 of adjusted gross income.  This is based off of 2018 taxes, unless you have already filed for 2019.

Unemployment Benefits
These benefits have been expanded to include an additional $600 from the federal government, on top of the state unemployment one would qualify for.  Additionally, this includes those previously excluded from qualifying, such as sole proprietors and independent contractors.

Small Businesses
The Paycheck Protection Program allows small businesses under 500 employees to apply for a loan in the amount of 2.5 times the business’s average monthly payroll expense from 2019.  If the business uses this money to retain employees and pay essential services such as rent and utilities, the entirety of the loan can be forgiven, and act as a tax free grant.

The EIDL is a $10,000 loan advance to businesses currently experiencing temporary difficulties due to COVID-19.  This loan does need to be paid back, but provides flexible and generous repayment terms.

Required Minimum Distributions
Those over 72 who previously were required to take Required Minimum Distributions from Pre-tax retirement accounts, can skip those distributions for 2020.  If you already took the distribution, there could be ways to reverse this and get the money back into your retirement account, if you wish to do so.

Charitable Contributions
You can now donate up to $300 to charities, and receive the tax deduction, even if you do not itemize and you take the standard deduction.

Student Loans
Federal student loan repayments have been suspended until September 30th, 2020 and will accrue no additional interest during this time.

Markets and Economy
The markets have stabilized over the past couple of weeks, and as of this writing, the S&P 500 index has recovered by over 10% since its lows in March.

April is going to be a difficult month, and we are going to continue to see scary headlines around the spread of the virus, job losses, and the damage our economy is experiencing.

We are also going to see incredible stories about our heroic healthcare professionals at the front lines, businesses stepping up to fill the need for medical supplies, new treatments that are showing promise, innovative testing strategies, progress in the development of a vaccine, and the spirit of the American people on full display.

We will continue to communicate on a regular basis, and thank you for the trust you have placed in Kane Financial.  If you have any questions or concerns, please do not hesitate to contact the office and/or schedule a meeting.



Kane Financial Update – March 17th, 2020

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I think many of us are still in a state of shock at what has transpired over the past 4 weeks.  The last update, two weeks ago, we predicted possible aggressive quarantine measures, schools closing, and large gatherings cancelled….it is difficult to believe those things became a reality.  

What I think happens next is that we get over the shock, and begin to move forward.  We are going to have a challenging period of time ahead of us that can last a few months or through the summer, nobody knows at this point.  What we do know is that we have some of the most amazing healthcare professionals in the world, we will get through this, and better days are ahead.

I believe the catalyst that will act as the beginning of a recovery will come from a break in good news.  Good news that Europe has gotten its situation under control, or a vaccine is ready to be rolled out to the masses, a successful treatment program has been found, or that we have been successful in flattening the curve here in the US.  This news, when it comes, will help to bring back confidence, clarity, and a recovery in our economy.

Speaking of our economy, the news is coming in at a dizzying rate so I cannot go into all of the details, but these are some of the developing items worth noting:

  • Markets – The markets are down around 25% from their highs in February.  For perspective, this puts us back to the levels around September 2017.  These sudden pullbacks present buying opportunities, and we will continue to take advantage of these when possible for clients.
  • Small business help – The SBA is already stepping in with disaster relief for small businesses to help weather this storm in the near term.  Expect more news around help for small businesses and their employees, hopefully included in the bill being drafted in the Senate.
  • Liquidity – The Federal Reserve has stepped into markets in a major way to ensure they continue running smoothly and there is plenty of liquidity in the system.  This was an issue in 2008-09, and they seem to be out ahead of this so there are not significant disruptions.
  • Checks Coming – Treasury Secretary Mnuchin today stated they plan on sending checks to the American people in the coming weeks.  Speculation were $1,000 checks instead of a payroll tax cut, as this would get money into citizens hands more quickly.  The amount is pure speculation, and they weren’t 100% clear on who gets them so stay tuned on this front.
  • Vaccine/Treatments – Organizations from around the world are racing to attack this virus from a number of angles including finding a vaccine, treatment programs, and preventive medicines for healthcare workers on the frontlines.  Phase one trials of a vaccine started this week after just 65 days, a record.  They hope to be ready to push forward in the late summer or early fall with the next phase.
  • Tax Relief – Individuals and businesses that owe taxes for 2019, can still file and defer those payments interest and penalty free for at least 90 days.
  • Technology & Telemedicine – The government has pulled back much of the red tape around healthcare, and are working on aggressive telemedicine initiatives.  Telemedicine is the ability for patients to phone conference or video conference with a healthcare professional.  This creates efficiencies, keeps vulnerable patients from needing to go to a doctors office or hospital, and if a healthcare professional is quarantined due to the virus, they can continue to help patients.

 We understand that this is a challenging time for everybody, and there are a lot of unknowns.  We will continue to communicate with clients on an ongoing basis, be diligent in our portfolio management, and continue to make ourselves accessible for questions and discussions at any time.

I am truly thankful in the trust you have placed in Kane Financial to help navigate these times, if you do have any questions or concerns, please do not hesitate to contact the office.

I wish you all the best.


Kane Financial Update – March 9th, 2020

5 Minute Read

As I was walking into a weekly economics class I teach on Fridays, there was a sign on the door that caught my eye “Stay calm and wash your hands.”  With all of the scary headlines out there, I was encouraged to see some common sense messaging to the public.

It has certainly been a stressful couple of weeks for investors, and the virus is first and foremost a human tragedy.  For the purposes of this writing, I am going to address it strictly from an economic and market perspective, discussing both the near term and the longer term.

Before I get into the details below, I just want to reiterate that I am confident that the market will recover from this selloff, it could take a few months or even a year, but markets will recover. 

Additionally, this is not 2008-09, banks are not overleveraged, there are not widespread bankruptcies, a housing crisis, a liquidity crisis, or a myriad of other issues that caused the global financial crisis.  We entered this downturn with a strong economy and healthy financial system.

In the short term, I would expect continued volatility and scary news headlines.  Longer term, the markets will recover, and this will be yet another blip in the long-term upward trend in stock market history.

First, let’s take a look at where we are after the recent market selloff, which is right about at the levels of August 2019 not including the selloff today, which puts us back a bit further.

What just happened these past two weeks?
The coronavirus obviously spread outside of the borders of China and made its way around the world and to the US.  China literally had to shut down its economy to help contain the spread.  The Dow Jones has been in existence for 6,200 weeks, with only 17 of those weeks seeing a 10% or more decline, which is what we experienced two weeks ago.  There is an old Wall Street adage, the market goes up an escalator and down the elevator, as you can see this from the above illustration.

That said, there is encouraging news out of China and South Korea as new cases of coronavirus have plunged, and businesses are reopening.  Additionally, 11 of the 16 makeshift hospitals opened in Wuhan, where the virus originated, have been closed.

As of this writing there have been 114,276 total cases of coronavirus worldwide (80,739 in China).  Of this, 66,843 are closed cases with a 94% recovery rate.  Of the 47,433 active cases, 87% are mild, while 13% are serious, affecting those mostly with underlying conditions and/or a compromised immune system.

Near Term – What to expect the next few weeks:
More volatility and uncertainty as we learn more about the spread of the virus domestically, and try to project its economic effect.  There could be aggressive quarantine policies put into place by state and local governments such as cancelling large gatherings, closing schools, and encouraging people to telework where possible.

Short Term – What to expect in the coming months:
Hopefully the development of a vaccine and a rebound in market stability.  Any aggressive quarantine policies would be temporary, and we could see a rebound in economic activity, earnings growth and stock prices.

Longer Term – What are some positives that can come out of all of this?

  • Mortgage rates could fall to all time lows, making it advantageous for homebuyers and those looking to refinance.
  • Diversifying supply chains, relying less on one country such as China, and possibly bringing more of that supply chain back to the US.
  • Better hygiene habits year round, helping to curb the spread of flu and the cold in the future.
  • More businesses exploring teleworking arrangements for employees so there is less of a disruption for business.  Kane Financial for example can be fully operational from anywhere with an internet connection, and more businesses may build that type of infrastructure in the future.
  • Better preparedness for future virus outbreaks.

What I have learned over 14 years in portfolio management is that American people and businesses are both resilient and adaptable.  When things go awry, we don’t bury our heads in the sand or throw up our arms.  We push forward, we adapt, and we will become better and more prepared.

I hope this was helpful, if you have any questions or concerns at all, please do not hesitate to contact the office.


Kane Financial Update – February 24th, 2020

3 Minute Read

Markets have experienced steep declines during the day, as the coronavirus has spread across Asia and into Italy.

I wanted to put together some information about the recent market volatility as it relates to the Coronavirus, along with some perspective on how markets have performed around other epidemics.

A well diversified portfolio is built for times of market volatility.  As your portfolio manager, we do not try and predict what the markets will do short-term, rather we take advantage of market swings through rebalancing, and thoughtful asset allocation strategies.

While the media will surely focus on the point swings, it is far more important to focus on the percentages.  As of this writing, the markets are off about 3% today.  For context, the 4th quarter of 2018 saw markets off approximately 15% – 25% depending on the index.  That fourth quarter turned out to be an excellent time to buy stocks.

While these swings can be unnerving, they can provide excellent opportunities for long-term investors.  Here is a brief breakdown of frequently asked questions:

What exactly is causing this market volatility?

It was announced over the weekend that cases of the Coronavirus jumped, and have spread to South Korea, and even Italy.  The markets have mostly shrugged off the news around this virus, but with the spread through Asia and now into Europe, price adjustments are inevitable.

What exactly are price adjustments?

A nice way of saying we could see weakness in the markets in the short-term until the spread of this virus is under control.  Markets will now have to take into account a likely decline in profits due to supply chain disruptions, travel and tourism industries will be affected, and global production could dip.

Are those profits lost forever?

Not necessarily, it comes down to a question of demand delayed vs. demand destroyed.  While you may cancel a vacation to Asia, there are still goods and services that consumers will buy, it’s just those purchases could be put off for a period of time.

If the markets are going to see weakness, should I change anything with my portfolio?

Your current portfolio should be aligned with your goals, time horizon, and risk tolerance.  If you are taking income, we have a portion of your portfolio invested in bonds and cash, allowing the stock portion of your portfolio to recover from either short-term or long-term losses.

Will this lead to a recession?

Only time will tell.  Earnings have remained strong and the US consumer resilient.  While several factors could lead to a recession, a long-term investing perspective has time and time again rewarded patient investors.

Please find below a link to some excellent information from MarketWatch on how other epidemics in history have affected the markets over short-term time periods.

MarketWatch – How the stock market has performed during past viral outbreaks, as coronavirus infects 31,000.

I hope you find this information helpful, and again, if you have any questions at all please do not hesitate to contact the office.  Have a great week!