From the desk of GS Wealth Management

MONTHLY ECONOMIC UPDATE

April 2020

MONTHLY QUOTE

“The best way to THE MONTH IN BRIEF measure your The Coronavirus Aid, Relief, and Economic Security (CARES) Act has been investing success is not by whether signed into law, bringing relief to millions of Americans, most of whom are you’re beating the expected to be quarantined for at least another month. The White House has market but by asked Americans to continue “socially distancing” during the month of April. whether you’ve put Volatility continued in International markets, even as the COVID-19 (novel in place a financial coronavirus) reached the United States. The Standard and Poor’s 500 (S&P plan and a 500) Index was down 12.51% for March.1 behavioral discipline that are likely to get you where you want to go.”

Key Provisions of the CARES Act

- Benjamin Graham Distributions can be waived in 2020 for Inherited Accounts, 401(k)s, and IRAs.

MONTHLY TIP Recently, the $2 trillion “Coronavirus Aid, Relief, and Economic Security”

Anyone who starts a (“CARES”) Act was signed into law. The CARES Act is designed to help those business needs an most impacted by the COVID-19 pandemic, while also providing key operational strategy. provisions that may benefit retirees.2 A good one includes metrics, a day-to- To put this monumental legislation in perspective, Congress earmarked day plan detailing $800 billion for the Economic Stimulus Act of 2008 during the financial who will do what, crisis.2 and an assessment of external and internal The CARES Act has far-reaching implications for many. Here are the most risks. important provisions to keep in mind:

Stimulus Check Details. Americans can expect a one-time direct payment of up to $1,200 for individuals (or $2,400 for married couples) with an additional $500 per child under age 17. These payments are based on the 2019 tax returns for those who have filed them and 2018 information if they have not. The amount is reduced if an individual makes more than $75,000 or a couple makes more than $150,000. Those who make more than $99,000 as an individual (or $198,000 as a couple) will not receive a payment.2

Business Owner Relief. The act also allocates $500 billion for loans, loan guarantees, or investments to businesses, states, and municipalities.2

Your Inherited 401(k)s. People who have inherited 401(k)s or Individual Retirement Accounts can suspend distributions in 2020. Required distributions don’t apply to people with Roth IRAs; although, they do apply to investors who inherit Roth accounts.3

RMDs Suspended. The CARES Act suspends the minimum required distributions most people must take from 401(k)s and IRAs in 2020. In 2009, Congress passed a similar rule, which gave retirees some flexibility when considering distributions.3,4

Withdrawal Penalties. Account owners can take a distribution of up to $100,000 from their retirement plan or IRA in 2020, without the 10-percent early withdrawal penalty that normally applies to money taken out before age 59½. But remember, you still owe the tax.5

Many businesses and individuals are struggling with the realities that COVID-19 has brought to our communities. The CARES Act, however, may provide some much-needed relief. Contact your financial professional today to see if these special 2020 distribution rules are appropriate for your situation.

LOOKING BACK…LOOKING FORWARD March saw the end of the worst quarter for stocks in U.S. history. The Dow Jones Industrial Average (DJIA) closed at 21,917.16. The Standard and Poor’s 500 (S&P 500) ended the month at 2,584.59, while the NASDAQ Composite Index closed at 7,700.10.6

MARKET INDEX Y-T-D CHANGE 1-MO CHANGE 2019 DJIA -23.20 -13.72 +22.34 NASDAQ -14.18 -10.12 +35.23 S&P 500 -20.00 -12.51 +28.88

BOND YIELD 3/31 RATE 1 MO AGO 1 YR AGO 10-YR 0.70 1.13 2.41 TREASURY Sources: Bloomberg.com, Barchart.com, treasury.gov - 00/00/00 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year Treasury real yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond.

Amid so much uncertainty about the duration and impact of the COVID-19 coronavirus, it’s difficult to say how much volatility might be ahead. The arrival of CARES Act checks and other stimulus measures should be a welcome relief to households and businesses. While it’s far too early to understand the full economic impact of what’s to come, the news that this ordeal has passed will be very welcome.

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The FTSE KLCI, also known as the FBM KLCI, is a capitalization-weighted , composed of the 30 largest companies on the Bursa Malaysia by market capitalization. The is a free float- adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The NIFTY 50 (National Index Fifty) is the broad-based stock market index for the Indian equity market. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. Established in January 1980, the All Ordinaries is the oldest index of shares in Australia. It is made up of the share prices for 500 of the largest companies listed on the Australian Securities Exchange. The Korea Composite Stock Price Index, or KOSPI, is the representative stock market index of South Korea, like the S&P 500 in the United States. The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The MSCI EAFE Index is an equity index which captures large and midcap representation across 21 developed markets countries around the world, excluding the U.S. and Canada. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The Bovespa Index, best known as Ibovespa, is the benchmark index of about 60 stocks that are traded on the B3 (Brasil Bolsa Balcão). The DAX is a blue-chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The RTS Index is a free-float capitalization-weighted index of 50 Russian stocks traded on the , calculated in U.S. dollars. The U.S. Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Under the CARES act, an accountholder who already took a 2020 distribution has up to 60 days to return the distribution without owing taxes on it. This material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Under the SECURE Act, your required minimum distribution (RMD) must be distributed by the end of the 10th calendar year following the year of the Individual Retirement Account (IRA) owner's death. Penalties may occur for missed RMDs. Any RMDs due for the original owner must be taken by their deadlines to avoid penalties. A surviving spouse of the IRA owner, disabled or chronically ill individuals, individuals who are not more than 10 years younger than the IRA owner, and children of the IRA owner who have not reached the age of majority may have other minimum distribution requirements.

Under the CARES act, an accountholder who already took a 2020 distribution has up to 60 days to return the distribution without owing taxes on it. This material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Under the SECURE Act, in most circumstances, once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ under the SECURE Act, as long as you meet the earned-income requirement.

Accountholders can always withdraw more. But if they take less than the minimum required, they could be subject to a 50% penalty on the amount they should have withdrawn – except for 2020.

CITATIONS: 1 - CNN.com, March 31, 2020. 2 - CNBC.com, March 25, 2020. 3 - The Wall Street Journal, March 25, 2020. 4 - The Wall Street Journal, March 25, 2020. 5 - The Wall Street Journal, March 25, 2020. 6- Bloomberg.com, March 31, 2020.