The news cycle over the past three to four weeks has been some of the craziest we have seen since 2020/2021. With unprecedented news coming out seemingly daily, investors have had much to digest. There is a popular belief that investors and markets hate and fear uncertainty more than anything else. So, with all of this uncertainty, how have markets reacted? Fairly rationally, so far.
The chart above shows the US stock market (represented by the S&P 500 index) in blue and the CBOE Volatility Index, or VIX (a measure investors and traders use to measure the level of risk, fear, or stress in the market), in orange. A few key dates are marked to indicate some major events that have taken place:
- June 27th – The first debate between President Biden and former President Trump that kick-started calls for Biden to step down.
- July 12th – The last trading day before the assassination attempt on former President Trump on July 13th.
- July 19th – The last trading day before President Biden announced that he would be dropping out of the 2024 presidential race on July 22nd.
While each event seemingly led to some sort of market reaction, most of the moves were relatively small. Volatility has ticked up and investors are taking some risk off the table, but no huge corrections have occurred. In fact, the news that moved markets the most during this period was a positive inflation report, not a political incident. RSWA Financial Advisor Insights – 7.19.24 We still have a long way to go until the first Tuesday in November, but as of now, markets seem to be more focused on the strong US economy and shrugging off outside noise.
RSWA & The Portland Sea Dogs - Join us Wednesday August 7th to cheer on the Portland Sea Dogs! The RSWA Summer Event will include a picnic and baseball as the Sea Dogs take on the Altoona Curve. Bring the kids, the grandkids and friends for a fun summer evening at the ballpark! The game starts at 6pm but the RSWA picnic kicks off at 5pm. Get Your RSWA Tickets
Financial Planning/Investment Strategy Corner:
Inheriting IRA Assets – Finally Some Clarity
In December 2019, Congress passed the original SECURE Act, bringing sweeping changes to rules governing distribution requirements for retirement accounts. The SECURE Act stipulates that “Non-Eligible Designated Beneficiaries” (essentially non-spousal beneficiaries) must empty the inherited retirement account by the end of the 10th year after the decedent’s death. This new rule applies to any account holder that passed after December 31, 2019. If you are/were an owner of an inherited IRA in which the original account owner passed before 2020, you are unaffected.
While one of the goals of this rule change was to simplify the distribution rules, the IRS left some ambiguity regarding the inheritor’s annual distribution requirements and has left many account holders in limbo. Finally, last week, the IRS issued final regulations on annual distribution requirements. Here are the updates starting in 2025: Federal Register – Required Minimum Distributions Kitces.com
- If the original owner of the IRA had not reached their required beginning date (the date at which an individual is required to start making required minimum distributions), the beneficial owner will NOT be required to make annual distributions. Their only requirement is to empty the account by the end of the 10th year.
- If the original owner of the IRA had reached their required beginning date, the beneficial owner WILL be required to make annual minimum distributions AND empty the account by the end of the 10th year.
A few additional clarifications:
- This does not apply to beneficiaries who inherit the account from their spouse. Spousal beneficiary options include keeping the account as an inherited account or rolling the account into their own IRA.
- This change does not take effect until 2025. No distributions are required for 2024.
- Prior years will still count as part of the 10 years (for example: a non-spouse individual who inherited an account in 2022, even though RMDs were not required in 2022-2024, they will still need to empty the account by 2032).
- Determining the required beginning date of the original account holder depends on the year they were born. PBGC.gov – Required Beginning Date
- 70 ½, if you were born on or before June 30, 1949
- Age 72, if they were born July 1, 1949-December 31, 1950
- Age 73, if they were born 1951-1959
- Age 75, if they were born 1960 or later
Still confused on the requirements? You are not alone. It is important to consult your accountant and financial advisor to determine if annual distributions are required for you.
Quick Hits:
- Beautiful coastlines, wine, warm swimming waters, and great hiking. This has to be California, right? Wrong. Why Nova Scotia is becoming a popular road tripping destination – Wall St Journal
- When Maine really wanted its caribou back - Life
- Stop me if you’d heard this one before. The world just had its hottest two days on record. - Axios
- Videos of a hydrothermal explosion in Yellowstone National Park – ABC News
Donovan’s Olympic Preview: The 2024 Paris Olympics officially start this afternoon with the Opening Ceremony. Every four years, athletes in sports that are often overlooked get two weeks to showcase their talents and sport to the world. I will be spending the next two weeks being the most critical judge for gymnastics, most obnoxious supporter of USA swimmers, and pretending I have any clue what is going on in handball or water polo. However, I will be most eagerly waiting for August 1st to roll around for my favorite sport, Track & Field (Athletics) to begin. While there will be dozens of amazing athletes and events taking place on the track, I wanted to highlight a few that I think casual fans should prioritize watching:
- Men’s & Women’s 100m – Everyone’s favorite track event; how could you miss it? Especially this year, when the USA has a great chance to win gold medals on both sides. Noah Lyles will be the highlight on the men’s side, as he is the defending 100m gold medalist in the 2023 World Championships. On the women’s side, it is Sha’Carri Richardson. Richardson infamously missed the 2020 Olympics due to a controversial positive marijuana test. She’s not back, she’s better (YouTube) and is the favorite to win in 2024.
- Women’s prelims start August 2nd with the final on August 3rd. Men’s prelims start on August 3rd, final on August 4th.
- Men’s & Women’s 200m – Noah Lyles will once again be in the spotlight on the men’s side. He is the 3-time defending world champion in the 200, and bronze medalist from the 2020 Olympics. Harvard grad and Massachusetts native Gabby Thomas will be USA’s best hope for a medal on the women’s side and should be in contention for gold.
- Women’s prelims are August 4th & 5th, final on August 6th. Men’s prelims August 5th & 7th, finals on the 8th.
- Women’s 400m Hurdles – If you can only watch one athlete, it has to be Sydney McLaughlin-Levrone. She is hands down the most dominant track athlete since Usain Bolt. The event itself may not be too entertaining because Sydney will likely blow away the field, but seeing her compete is well worth the watch. Prelims are August 4th & 6th, finals on the 8th.
- Men’s & Women’s 1500m – I am personally biased toward the distance events, but I know asking people to sit through a two-hour literal marathon or a 27-minute 10,000-meter race doesn’t appeal to many. But if you have 3.5-4 minutes, you won’t be disappointed with this year’s 1500.
- Men’s – If you like trash talk and rivalries, there is none bigger this year than Norway’s Jakob Ingebrigtsen and UK’s Josh Kerr. The two have been going back and forth on and off the track for the past two years and are the two favorites to take home gold. Two Americans, Indiana native Cole Hocker and Kentucky native Yared Nuguse, will try to spoil their party. The final will be on August 6th.
- Women’s – In my opinion, this will be the most competitive race out of any track event this year. World record holder, Faith Kipyegon of Kenya, is the odds on favorite to win, but what happens behind her is anyone’s guess. Two Americans will be in contention Nikki Hiltz and Elle Purrier St. Pierre. St. Pierre is a Vermont native and dairy farmer, University of New Hampshire grad, is coached by former Phillips Exeter Academy and Dartmouth College coach Mark Coogan, and just had a baby about 16 months ago. She will be a fan favorite for New Englanders, for sure. The final will be on August 10th.
For a full schedule of all Olympic events here is a link: 2024 Paris Olympics Schedule
Thanks for letting me go on this tangent. You have four years until you have to hear me go on about track again. 😊
Quote: “I’m human. I’m just like you. I just run a little faster.” – Sha’Carri Richardson
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