February 2021

Part of sleeping well at night, if you are invested in the financial markets, is trying to control or set limits on those elements of the financial markets that you can control: expenses and ownership. Being invested through a separately managed account (SMA) allows the portfolio manager to essentially eliminate the fee from consideration by using the tools of asset allocation and tax loss selling that minimizes taxes from recognized capital gains, to allow almost 100% of the annual gain in a portfolio to remain in the portfolio.

What will 2021 bring? Two thousand twenty was a crazy year, and the S&P 500 Index returned 18.4%, having appreciated 31.5% in the prior year. The equity benchmark’s strong 2020 performance included the rapid, steep bear market brought about by COVID-19, followed by an equally dramatic recovery. The market started reaching new highs again by August and continued to reach new highs through year-end. If the pandemic can’t cause more lasting damage to stock prices, can anything?

Socially responsible investing (SRI). Integrating environmental, social, and governance (ESG) factors in the investment process. Applying principles for responsible investing (PRI) to investment decisions. Sustainable. Green. Ethical. Impact investing. These terms are all part of the socially conscious investment jargon getting a lot of “airtime” in the news media, particularly in financial circles. The goal for all of these investment styles is essentially the same, to produce a positive investment return and a positive impact on society and the environment.

Some tax advisers are worried that the “golden age of gifting” may be ending soon after 2020. The phrase “tax exempt gifting” refers to the different tax status of lifetime gifts (gift taxes are only based on the gift amount received) compared to inheritances (where the full value of the transfer at death is subject to the estate tax, if any, including the funds which will be used to pay the estate tax). The three tiers of tax-exempt gifting, in order of importance, begin with the $15,000 annual exclusion gift to anyone, which is always tax free and also paperwork free, if the spousal consent is not sought.

Julie Phippen, an Executive Administrative Assistant at Agawam Trust and Management Company (an affiliate providing estate and trust administration services for Woodstock), noticed a need while traveling in Zimbabwe and ended up establishing a 501(c)(3) nonprofit organization to meet that need. Sewpportive Friends began in 2016 with the mission of empowering women in Africa by providing healthy, handmade feminine care products and the education to enable women to produce their own. Just as a small pebble tossed into a pond sends out far-reaching ripples, Sewpportive Friends has expanded to touch more lives in the US and Africa.