How the Markets are Performing After the Presidential Election

After two months in a row of losses for the S&P 500 and DOW in September and October, election day in November immediately created a nice relief rally that we participated in at TD Ameritrade (Source: https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC). We encourage you to meet with us for a review meeting to discuss your individual performance.

We mentioned in our last market commentary that while past performance does not necessarily predict future performance, during presidential election years in the past 70 years, on average the stock market has rallied to end the year after the election is over (Source: https://www.forbes.com/sites/kristinmckenna/2020/08/18/heres-how-the-stock-market-has-performed-before-during-and-after-presidential-elections/?sh=5393bc7e4f86). There is a good chance that Congress will create a new stimulus program before year-end that may also help the stock market have a positive end to the year in December. There are also promising results from multiple vaccine trials that is encouraging the markets, despite the delay of 3-6 months before most people would have access to it.

How could the senate race affect the market?

We’re still laser-focused on the Senate runoff in Georgia, as that will ultimately determine the balance of power in Congress. The stock market usually does not like uncertainty. If the House is controlled by the Democrats and the Senate is controlled by Republicans, there’s a good chance they’ll argue and not accomplish too much. We are currently in a low tax environment historically speaking, so no change when it comes to tax policy is considered positive by most stock market participants. Bottom line: We plan to do everything in our power to protect and grow your money in 2020, despite the coronavirus and the election. By reviewing your portfolio holdings at TD Ameritrade daily, we believe we have the potential to accomplish that goal.

Any Questions?

If you have any questions about taxes, your individual investment portfolio, our 401(k) recommendation service, or anything else in general, please give our office a call at (586) 226-2100. Please feel free to forward this commentary to a friend, family member, or co-worker. If they would like to receive this commentary in the future, please send us an e-mail at **info@summitfc.net** at your earliest convenience. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.

Thank you for your confidence and referrals!

Bob Wink, Ken Wink, Jim Wink and Zach Bachner

Interesting Points

The average receipt at CVS is 2.5 feet long. Source: _\-Green America_

About 26% of U.S. adults now get their news from YouTube. Source: _\-Pew Research, September 28, 2020_

“It’s so hard to forget pain, but it’s even harder to remember sweetness. We have no scar to show for happiness.” \-Chuck Palahniuk

Apple sold up to 2 million iPhone 12 units in the first 24 hours after release, up from 800,000 units of the Apple iPhone 11. Source: [\-CNBC, October 20, 2020](https://markzinder.us13.list-manage.com/track/click?u=7f2155abd3fef568fc34efd51&id=526c898b4c&e=7a34cf03fa)

In a typical year, 3.6 million eviction cases are filed. However, if present conditions persist and there is not a new round of federal relief, as many as 40 million people could be at risk of eviction in the coming months. Source: _\-Reuters, October 31, 2020_

A report by the House Ways & Means Committee shows that Americans pay on average nearly four times more for prescription drugs than 11 economically similar countries. The United States could save $49 billion annually on Medicare Part D alone by pricing drugs similarly to the other countries studied. Source: _\-Becker’s Hospital Review, September 24, 2019_

Voters who back a losing presidential candidate can experience as much as a 30% temporary reduction in all-around life satisfaction following the election. That’s a larger drop in happiness than Boston residents experienced following the Boston Marathon bombing. Source: _\-The Atlantic, November 5, 2020_

Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.

This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.

Disclosures regarding our performance reporting: Because some clients are in the 10% tax bracket and others are in the 37% Federal tax bracket, we have decided to report performance before taxes. If you have a non-qualified account, please feel free to contact us to determine your individualized rate of return after tax. All of Summit’s performance is after our 1.25% advisory fee that is deducted monthly. Your fees may be higher or lower depending upon the amount of assets invested with our firm. Feel free to contact us to receive online access so you can see your personalized rate of return. The Aggregate bond index we use is ticker AGG, and all dividends and distributions earned are reinvested and included in the performance numbers. The S&P 500 index and Dow Jones index quoted above does not include dividends within the performance. If a holding within our portfolio does pay a dividend or other income, it is reinvested, so our performance does include dividends. This report has been prepared from data believed reliable, but no representation is made as to accuracy or completeness. Total return and principal value will vary depending upon the deduction of advisory fees, brokerage commissions, reinvestment of dividends and other earnings or fund charges and because of this, especially if you are a brand new client that was invested in the middle of the month or if you made a deposit or withdrawal in the month, adviser’s clients may have had materially different results from the results portrayed in the performance numbers disclosed. This information is provided to you in combined form, solely for your convenience and ease of review and is not an offer or solicitation to buy or sell any securities. In order to verify that all account values and transactions are accurate, we encourage you to compare the information provided in our statement with the statement you receive directly from your custodian. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. The performance data in this report represents past performance and does not guarantee or imply future results. Current performance may be lower or higher than the performance data quoted in this report. Because we use bond funds and inverse funds as hedges, there will be months where we underperform the Dow Jones and the S&P 500 index, but also months where we will outperform. We do our best to manage stock market volatility, but anything is certainly possible.

The returns are calculated using a true daily time-weighted rate of return (“TWRR” as a primary performance return methodology). TWRR is the CFA Institutes Global Investment Performance Standards (“GIPS”) required calculation for managed accounts. TWRR provides a measure of how an account was managed regardless of the dollar value and is unaffected by external cash flows. TWRR is required in GIPS Guidelines for managed accounts for two primary reasons:

1. Impact of external flows on TWRR: Since an advisor typically does not control the timing or magnitude of investor cash flows, TWRR is deemed appropriate as it isolates performance regardless of the portfolio/account’s dollar value and external flows.
2. Comparison across portfolios and benchmarks: TWRR can be used to directly compare performance with other portfolio/accounts and is an appropriate metric to use when comparing portfolio/account performance to benchmarks.

Please update Summit Financial Consulting LLC if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an add