Insights

U.S. equities, as measured by the S&P 500 Index, returned less than 1% in the quarter, including dividends, bringing year-to-date performance to +16%. Non-U.S. stocks, as measured by MSCI’s All Country Worldwide Ex-U.S. benchmark, fell 3% including dividends, ending the third quarter up 6% on a year-to-date basis.

As stimulus measures wind down, we expect economic growth to slow, but remain firmly positive. This is good news, as it means the economy is healthy enough to expand on its own, buoyed largely by business and consumer spending.

Sophie Costley served in our Operations Group for 46 years, setting a high bar for the rest of us! Joe Flynn was with Howland Capital for over 30 years as a tax manager. He is still involved with the firm, consulting as our Senior Tax Advisor.

Howland Capital’s Five Core Beliefs When it Comes to Saving for Retirement + Top Ten Recommendations for Saving for Retirement.

While Howland Capital has continued to regularly update you on regarding investment news and the market, as we approach the end of summer, we would like to provide you with a firm update.

With the American Rescue Plan Act, the child tax credit was expanded effective only for 2021.

A recent survey of professional economists conducted by the Federal Reserve Bank of Philadelphia predicts real GDP will grow at an annualized rate of 7.9% for the second quarter, following growth of 4.3% and 6.4% in the prior two quarters. At this rate, the economy will likely exceed the broad level of pre-pandemic output reached in 2019.

U.S. equities, as measured by the S&P 500 Index, returned more than 8% (including dividends) in the second quarter, bringing year-to-date performance solidly into double-digit territory. Non-U.S. stocks, as measured by MSCI’s All Country Worldwide Ex-U.S. benchmark, returned more than 5% in the second quarter including dividends, and is up more than 9% year-to-date.

We expect to see a gradual tapering in the Fed’s bond purchases along with an increase in the federal funds rate, which is the short-term interest rate set by the Federal Reserve. The Fed has pegged short-term interest rates at zero since 2019, which has made income on short-term bonds paltry at best. It has also been buying $120 billion in Treasury and mortgage bonds each month since last June, which has lowered intermediate and long-term interest rates.

This plan contains several proposals for changes to individual income and estate tax law. It is the third of three plans put forth by the Administration. The first is the recently enacted American Rescue Plan, which provided additional economic stimulus. The second is the recently introduced American Jobs Plan, an infrastructure bill.

While part of this rise can be attributed to the improving economy, the rise is also due to the expectation for accelerating inflation.

We continue to make progress in the struggle against COVID-19. The global economic recovery is underway. Corporate earnings are expected to increase, and the outlook is turning more positive. Threats and fears always remain, but the path forward looks bright and global stock markets are generally reacting as such. U.S. stocks, as measured by the S&P 500 Index, returned 6% in the first quarter, including dividends and non-U.S. stock markets, as measured by MSCI’s All Country Worldwide Ex-U.S. benchmark, returned 4% including dividends.