Market Rally Proves Resilient December 28, 2020 Weekly Update Print Please note: This update was prepared on Thursday, December 24, 2020, before the market’s close. The bulls remain in charge. Neither last-minute bickering by lawmakers over much-needed COVID-19 relief legislation nor the emergence of a more infectious variant of the virus was enough to overcome positive news on the vaccine front as stocks headed into the Christmas break at or near record highs. Meanwhile, signs that the most recent wave of infections and lack of fiscal support is straining the economy continued to emerge: Consumer spending declined in November for the first time in seven months while household incomes slid slightly. Home sales also declined—although likely due to low inventory rather than declining demand—and consumer confidence dipped. Altogether, the picture is one of consumer retrenchment heading into the new year. Unfortunately, holiday travel has not followed suit and the potential for one more wave of infections is on the rise. According to numbers from the TSA, passenger traffic has soared to the highest levels since the pandemic first gripped the country. We are holding our collective breaths. Source: TSA. The virus may continue to have the upper hand over the near term. But over the mid-to-long term, we think the vaccine will triumph. So, as long-term investors rather than traders, we remain focused on two things—economic fundamentals and vaccine facts. On a total return basis, through Wednesday, the Dow Jones Industrial Average is up 8.0% for the year, while the broader S&P 500 index has gained 16.3%. The MSCI EAFE index, a measure of developed international stock markets, is up 6.1%. As of Thursday, the Bloomberg Barclays U.S. Aggregate Bond index’s yield stood at 1.44%, down from 2.31% at the end of 2019. The U.S. bond market has returned 7.1% this year. Let’s Make a Deal Investors on both sides of the pond are standing by as lawmakers parse last-minute details on a couple of make-or-break deals. Congress’ long-awaited second round of COVID-19 relief, intended to give consumers and the economy a shot in the arm heading into the final week of 2020, was forestalled Tuesday night when a balk by the White House threw the bill’s passage in doubt. The president’s threat to reject the $900 billion bill raised the unpleasant possibility that help may no longer be just days away—though the House is set to convene tonight to attempt to address the Oval Office’s demand for $2,000 direct payments to individuals. Questions over a government shutdown also loom. The U.S. didn’t have a lock on eleventh-hour negotiations this week. In Brussels, another $900 billion deal—this time the Brexit trade accord—looked in jeopardy. Negotiators pored over terms for trade between Britain and the E.U. as well as cooperation on issues such as border enforcement and counterterrorism. An agreement was finally secured today, just days ahead of the end-year deadline, to cement the U.K.’s exit from the E.U., alleviating immediate concerns of major economic disruption. It’s unclear whether the COVID-19 relief bill in the U.S. will find a near-term path to passage, but we can say with confidence that any agreement on stimulus will be good news for investors and make for a more festive holiday. Vaccine News Is the Only News That Matters News of a new and possibly more virulent strain of COVID-19 spurred many countries to ban travel to and from the U.K.—where it was first identified—in advance of the Christmas holiday. After an initial sell-off, markets quickly rebounded as the worry was superseded by reassuring headlines of more (and more rapid) vaccine distribution and indications that the existing vaccine will likely guard against the upstart strain. That pattern is the same one that has dominated the year: Virus threats and concerns have checked markets temporarily, but renewed hopes and strong signals that we’ll be able to emerge from this pandemic in 2021 have pushed markets upward. ***** Financial Planning Focus: 4 Things to Consider When Choosing a Trustee Trusts can be a great way to protect your assets and transfer wealth to family members and charitable causes. But it’s how those trusts are managed that really determines their efficacy. To ensure your intentions are honored, you’ll need to make sure you select the right trustee—someone trustworthy, prudent and agile enough to respond to your beneficiaries’ needs promptly over the course of their lives. For a revocable or living trust, ensuring the funds are in the right hands is simple: You can designate yourself as the trustee. Irrevocable trusts (or revocable trusts whose grantor has passed away) can be a different story. Trust documents can spell out most powers but aren’t meant to anticipate every scenario that trustees or beneficiaries might come across. Here are four critical questions to consider to help you choose the right trustee. What does the trustee do? Trustees have oversight over all property held by the trust and have the power to make investment decisions about cash or securities as well as managing businesses or real estate held in trust. They are also responsible for filing tax returns and distributing payments to beneficiaries. A trustee is legally liable for their actions, so they’ve got skin in the game. In short, being a trustee can be a full-time job, so whomever you pick should understand the commitment involved. Do you need a professional trustee? The answer to this question depends on your estate and your beneficiaries. Professional trustees can include a financial institution, like a bank, or advisers with significant experience serving as trustees. These trustees have the resources and technical know-how to properly administer trusts and can help provide continuity, objectivity, operational knowledge and consistency, serving several generations of a family. But they might be less familiar with the personal needs of your family and less flexible when making distribution decisions. Individual trustees are generally family members or friends whom the donor trusts to understand and carry out their intentions. Family trustees may need to engage investment advisers and other professionals to fulfill their fiduciary duties. If you have an individual trustee in mind, it might make sense to also appoint a professional co-trustee to handle logistics. What is the trust’s timeframe? Trusts can be set up to last for decades. Or they may terminate upon the passing of a spouse or child. If you’re setting up a trust to benefit several generations, you may need to select a professional, institutional trustee to ensure continuity. But even if you intend the trust to dissolve in the short or medium term (say, when a minor child becomes an adult), it’s still wise to provide instructions on how future beneficiaries should pick (and potentially remove) future trustees in case your designated trustee resigns or becomes incapacitated. Will the trustee be paid? Trustees are legally entitled to reasonable fees for their services and professional trustees will often have fee schedules you can compare. Generally, the more complex your trust is to administer, the higher the fees. If your trust is relatively simple with few beneficiaries, an individual trustee might be a better option. Their fees might be lower or even limited to expenses that they incur for their work on the trust. Naming a trustee who is knowledgeable, reliable and can navigate your family’s dynamics should ensure that your goals are achieved and that your heirs are cared for as intended. ***** Strategy Activity Update Please see below for a summary of the trades we executed over the week through Thursday and our current tactical strategy allocations. Dividend Income No trades this week. AIQ Tactical Global Growth Sold iShares S&P 500 ETF (IVV). Bought iShares NASDAQ Biotechnology ETF (IBB). AIQ Tactical Defensive Growth No trades this week. AIQ Tactical High Income No trades this week. AIQ Multi-Asset Income Sold Invesco DB Agriculture fund (DBA). Buy Invesco DB Commodity Index Tracking fund (DBC). Adviser Investments’ Market Takeaways In the latest Market Takeaways video on our website, Research Analyst Liz Laprade spoke about the latest round of Bitcoin hype and whether the cryptocurrency is the new gold. Looking Ahead The final week of 2020 will be short on trading days and light on data, but we will get data on home prices and sales as well as a fresh update on jobless claims. As always, you can visit www.adviserinvestments.com for our timely and ongoing investment commentary. In the meantime, all of us at Adviser Investments wish you a safe, sound and prosperous investment future. About Adviser Investments Adviser Investments is a full-service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trusts, institutions and foundations since 1994, and have more than 3,500 clients across the country and over $7 billion in assets under management. Our portfolios encompass actively managed funds, ETFs, socially responsible investments and tactical asset allocation strategies, and we’re experts on Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. Our minimum account size is $350,000. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868. Please note: This update was prepared on Thursday, December 24, 2020, before the market’s close. This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Purchases and sales of securities listed above represent all securities bought and sold in each strategy during the period stated. Each strategy’s portfolio generally includes more holdings in addition to the transactions listed above and in some cases the securities listed above may only represent a small portion of the particular strategy’s complete portfolio. Further, the securities listed above are not selected for listing based on their investment performance; thus it should not be assumed that any of the securities listed above were profitable or will be profitable, nor should it be assumed that future recommendations will be profitable. Clients and prospective clients should only make judgements about a strategy’s performance after reviewing the strategy’s composite performance information. There is no assurance that each security listed above will remain in the strategy’s portfolio by the time you have received or read this email. Securities are listed for informational purposes and are not intended as recommendations. 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