Insights

Today, the opposite is true. Vaccines are available, and the infection rate has dropped well below prior peak levels. At the current pace of vaccination, healthcare experts are saying we will be close to “herd immunity” by mid-summer, allowing for further loosening of restrictions. With a new administration and a slim majority in Congress, the Democrats have rolled out an enormous fiscal package to support growth and are expected to pass more legislation later this year. The benefits of the recent fiscal package are targeted towards lower and medium income families who are most likely to spend it. Further fiscal stimulus packages are likely to be partially funded with higher taxes, but we expect any tax increases to be phased in gradually.

Perhaps it brings other milestones into focus that may not have been noticed – but there are many of them. Dusty Howland founded “Blackstone Management” in 1967, over fifty years past, with his son Tony joining 35 years ago to guide the firm (Howland Capital Management) to now oversee over $2.5 billion of assets.

We are writing with an important update regarding changes to the filing deadline for 2020 tax returns.

Bitcoin is a virtual, digital currency (“cryptocurrency”) invented in 2008 by an unknown person or group (under the alias of Satoshi Nakamoto). Supply is fixed at 21 million “coins” that can be sent from one owner to another without central bank or single administrator involvement. Bitcoin transactions are recorded and kept on a transparent, decentralized, and peer-to-peer network, which was developed and is available to all via open-source software. “Blockchain” is the technology underpinning the distributed ledger where all bitcoin transactions are recorded. Bitcoin is the largest cryptocurrency, as measured by the dollar value in circulation, of many types of cryptocurrencies developed using blockchain technology.

Howland Capital is not involved, and has no intention of taking any action, in any of these activities. Recent market unrest involves individual (“retail”) investors organizing on platforms such as Reddit and trading on platforms like Robinhood to buy shares and speculate in stock options in a coordinated fashion. This activity has resulted in unusual volatility in a number of specific stocks. The common thread among the stocks making headlines is that they are all heavily “shorted” by professional investors. In other words, hedge funds are betting against, or “shorting” these stocks because the fund managers, using fundamental research, have high conviction the stocks will fall in value.

Short-term interest rates remain close to zero, while the 10-year U.S. Treasury Note yield hovers around 1%. With inflation running about 1.6%, “real” returns on government debt turned negative as the coupon income remains below expected future price increases. It is an odd investment dynamic, but with some $18 trillion of sovereign debt outside the U.S. offering negative absolute yields, U.S. Treasury bonds remain the safe and stable choice for many.

In early December, the IRS Commissioner announced that there are still approximately 6.8 million returns in process, more than one million unprocessed returns and three million pieces of unopened mail.

...the “Wall of Worry” we wrote about in last quarter’s Economic & Market Commentary. In the U.S., the S&P 500 Index increased 12% (price appreciation plus dividends) during the quarter, rising 68% from the March 23rd low. For the year, the index returned 18.4%, which is 11% above the February 19th, pre-pandemic high of 3,394. These results are phenomenal on a stand-alone basis, but even more pronounced in light of the S&P 500’s 31.5% return in 2019.

Major economies around the globe contracted sharply in March as the pandemic worsened, leading to a sudden drop in output and sharp rise in unemployment. It seemed the world stood still in March as we entered lockdown at home and abroad. As we turn the page on a difficult year, we look ahead to a brighter future. As always, risk and uncertainty remain, yet we have high confidence that the most challenging days are behind us and that the nascent recovery will continue in the year ahead.

All Hallows' Eve," aka Halloween, is a celebration observed in many countries on the 31st of October, the eve of the Western Christian feast of All Hallows' Day. It begins the observance of Allhallowtide, the time in the liturgical year dedicated to remembering the dead, including saints (hallows), martyrs, and all the faithful departed.

The IRS has struggled to address the problem of tens of millions of pieces of unopened correspondence, including payments. As a result of the backlog of mail that accumulated over spring and summer (unopened mail was estimated to number 12 million items), millions of taxpayers received balance due notices from the IRS. The IRS announced in August that it had suspended sending certain balance-due notices to taxpayers while it continued to process its backlog of unopened mail, which may, in some cases, contain the sought payments.