Quote of the Week

 “Your attitude, not your aptitude, will determine your altitude.” – Zig Ziglar

Technical Corner

The markets sold off slightly last week with most of the Indexes off about 1% to 2%. The markets were up yesterday (Monday) and down today. It appears we are still in a trading range. The concern from a trading standpoint is that the FAANG stocks have been selling off from their July 13th high. It smells like 2000 all over again.  However, with the Fed backstopping the market, who knows what direction the markets will take. It appears to me that the Fed is playing the role of the Little Dutch Boy, sticking a finger in the holes in the dike as they appear.

Initial unemployment claims exceeded one million for the 18th straight week. The trend is on the rise again. With the economy starting to be locked down again due to the ill-advised early re-opening, it appears that the “V” shaped recovery is fading.  Larry Kudlow, the White House economic advisor, on Sunday assured us that the recovery is roaring back.

I used to have a lot of respect for Kudlow when I started in financial planning.  Not anymore.   He also said everything was fine and dandy in January of 2008, and we know what happened then. 

I just saw this morning that retail sales have started to go back down for July after rising in May and June. Not unexpected as the virus is now out of control, and people are afraid to go out shopping. The vast majority of our economy is consumer spending. Many epidemiologists are saying that we need to “really” shut down the economy to get the virus under control. That isn’t going to happen.

We are still maintaining our conservative asset allocation position being mostly in bonds and gold. We have taken two small ETF positions in the Chinese stock market and Chinese internet stocks. The Chinese shut the virus down, and their economy is starting to expand.

Here is my big prediction for 2020. There will be no football season, or it will be canceled during the season. If baseball, a non-contact sport, can’t handle the virus, how do you expect 22 players breathing heavily and running around hitting each other not to spread the disease?

Lisa’s Thoughts   

IRS Outlines Changes to Health-Care Spending Rules Under CARES Act

The amended rules under the Coronavirus Aid, Relief, and Economic Security (CARES) Act provide flexibility for health-care spending related to the ongoing COVID-19 pandemic. 1

High-deductible health plans cover telehealth services

Under the CARES Act, a high-deductible health plan (HDHP) can temporarily cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law.

Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is eligible individual to make tax-favored contributions to his or her health savings account (HSA). Thus, an otherwise eligible individual with HDHP coverage may still contribute to an HSA despite receiving coverage for telehealth and other remote care services before satisfying the HDHP deductible, or despite receiving coverage for these services outside the HDHP. These changes are effective for services provided on or after January 1, 2020 through December 31, 2021.

Additions to qualified medical expenses

The CARES Act also modifies the rules for “qualified medical expenses” that are reimbursable from tax-advantaged health savings accounts (HSAs), Archer Medical Spending Accounts (MSAs), health flexible spending accounts (FSAs), and Health Reimbursement Arrangements (HRAs). Specifically, the cost of menstrual care products is now reimbursable. These products are defined as tampons, pads, liners, cups, sponges and/or other similar products. In addition, over-the-counter products and medications are now reimbursable without a prescription. The new rules apply to amounts paid after Dec. 31, 2019. Taxpayers should save receipts of these purchases for their records and so that they are able to submit claims for reimbursement.

1IR-2020-122, June 17, 2020

Copyright 2020 Broadridge Investor Communication Solutions, Inc

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These are the opinions of Larry Lof and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the US economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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