​3340 Tully Rd, Suite B4, Modesto, CA  95350  |  t: 209.857.5207  |  f: 209.857.5098  | www.blomandhowell.com

Dear friends,
 
I am excited to write to you today to share some exciting news that recently occurred at Blom & Howell Financial Planning.
 
Please join me in congratulating my friend and colleague, Michael Howell, who recently received the CERTIFIED FINANCIAL PLANNER™ designation.
 
Becoming a CFP® professional is one of the most difficult and stringent processes in the financial services industry, as I am sure Michael can attest. To become certified, candidates must meet education and experience requirements, as well as pass the difficult and comprehensive CFP® Certification Exam before they can call themselves a CFP® professional.
 
Successful passage of this exam requires a deep knowledge and understanding in areas of retirement, investing, education, insurance, taxes, and estate planning.
 
Furthermore, the CFP® professional makes a commitment to the CFP Board to abide by standards set forth in CFP Board’s Code of Ethics and Standards of Conduct. They are also held to a fiduciary standard of care, committing to serve the best interests of their clients at all times.
 
I have known and worked alongside Michael for eight years and have played a part in his understanding and growth in this industry. Without reservation I can say he loves to provide guidance and counsel in all areas of his client’s financial planning as it relates to their objectives.
 
This is just another area in which we are committed to you, our clients, here at Blom & Howell Financial Planning.
 
We know financial planning is a dynamic process and means something different for every family and we are committed to providing you a high standard of financial planning to the best of our abilities.
 
Please join me in congratulating Michael Howell. If you’d like to send him well wishes, his email is michael@blomandhowell.com.
 
 Best Regards,

Gary G Blom

How much do you know about the different coverage options?
 
Medicare’s open enrollment period runs from October 15 to December 7. If you are enrolling in Medicare for the first time, give yourself plenty of time. You may discover that it is much more complex than an employer-sponsored group health plan.1
 
When you enroll in Medicare, you pay multiple premiums for multiple types of coverage (Parts A and B, as well as the Part D prescription drug plan). Unlike a group health plan, there are no caps on out-of-pocket costs and a risk that you might have to pay a hospital insurance deductible more than once per year. Original Medicare also does not cover some costs that many seniors would like to cover, such as dental and vision care expenses.2
  
This is why so many retirees decide to buy Medigap policies or enroll in comprehensive Medicare Advantage (Part C) plans—they recognize the shortcomings of original Medicare. The downside of Part C plans is that you are restricted to the doctors in their networks. Original Medicare allows you to choose any doctor that accepts Medicare (though it is smart to have a Medigap policy as well).
  
You can freely switch from one Medicare Advantage plan to another in the open enrollment period; you can also enroll in one without having to go through underwriting. If you want to move from a Part C plan back into original Medicare, you may not be able to supplement Parts A and B with a Medigap plan right away because underwriting will be required.3
  
Whether you are enrolling in Medicare for the first time or considering a change in coverage, it is vital to understand these matters. If you have questions, visit Medicare.gov or ssa.gov/Medicare for more information.
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment.
 
Citations
1. cnbc.com, August 26, 2020
2. medicare.gov, September 16, 2020
3. medicare.gov, September 16, 2020

A look at these securities, in light of the Federal Reserve’s new outlook.
 
This summer, the Federal Reserve made a key policy shift. It announced that it would focus on promoting job creation and tolerate a little more inflation along the way for the near future.
 
Fed Chairman Jerome Powell stated on August 27 that the central bank plans to now “seek to achieve inflation that averages 2 percent over time,” rather than proactively adjust short-term interest rates when inflation approaches that established target. So in the near term, 2% inflation may or may not compel the Fed to hike.1
 
Powell called this a “robust updating” of Fed strategy. Historically speaking, it is. As his predecessor, Janet Yellen, told The New York Times, “most of the Fed’s history has revolved around keeping inflation under control. This really does reflect a decisive recognition that we’re in a very different environment.”1
 
What could this change mean for investors? It may lead some to take a look at Treasury Inflation-Protected Securities (TIPS).
  
In the past, the Fed has raised short-term interest rates in times of declining unemployment, as a precaution against the possibility of the economy “overheating,” which may cause inflation. If the Fed takes the same precaution in this decade, households may seek investments with the potential to react to higher interest rates, and TIPS may be worth consideration.1
 
How do TIPS react to inflation? The principal amounts of TIPS adjust in response to variations in the Consumer Price Index (CPI), which measures inflation changes. When the CPI increases, so do the principal of these securities. If the CPI falls, their principal reduces.2
 
TIPS pay a fixed rate of interest, paid every six months. The fixed interest rate applies to the adjusted principal so that interest payments can vary from one 6-month period to the next.2
 
The relationship between TIPS and the CPI can also affect what the bondholder earns when the securities mature. At that point, the bondholder receives either the adjusted principal or the original principal, whichever is greater.2
 
Just how are TIPS taxed? Interest income from TIPS is currently exempt from state and local taxes but subject to federal income tax. Adjustments in principal are taxed as interest in the year the adjustment occurs, even though the bondholder does not receive the principal adjustment until maturity. Individuals should consider their ability to pay the current taxes before investing.3
 
TIPS can be confusing, so you may want to consult with a financial professional who can guide you on how inflation-protected securities work. Also, remember, this article is for illustrative purposes only. Please contact a tax, legal, or accounting professional if you are concerned about how TIPS may influence your overall tax strategy.
  
We have seen low inflation recently, but inflation has crept higher during certain times in our history. The Consumer Price Index rose an average of 1.77% annually during the 10-year period ended December 31, 2019. During 1990-1999, however, it averaged 3.01% annually. Many remember the Seventies and Eighties when inflation was much higher than that.4
 
If you are concerned about inflation picking up and feel that short-term interest rates may increase, TIPS may be worth considering.
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment.
 
Citations
1. New York Times, August 27, 2020
2. The Balance, February 1, 2020
3. U.S. Department of the Treasury, August 13, 2019
4. Statista, September 11, 2020

​
U.S. Markets

Stocks dropped in September as investors worried about stalled fiscal stimulus talks in Washington, the upcoming election, and new coronavirus cases in Europe.

The Dow Jones Industrial Average, which lagged this year slipped 2.28 percent. The Standard & Poor’s 500 Index lost 3.92 percent and the Nasdaq Composite declined 5.16 percent.1
 
Tech Stocks Under Pressure

After a strong rally in August, investor sentiment quickly turned negative as technology stocks dragged down the overall market.

The retreat in the technology sector gathered steam as the month wore on, sending the tech-heavy Nasdaq Composite into correction territory over a three-day span following a recent record high. A correction is defined as a decline of at least 10 percent but not more than 20 percent from a recent high.2
 
A Few Bright Spots

The month did offer moments of optimism, however, that sparked brief rallies, such as an increase in merger and acquisition deals and further reported progress on a COVID-19 vaccine. However, concerns about the November election, the fading hopes for a fiscal stimulus bill, and an increase in European COVID-19 cases weighed heavily on investor sentiment.

As September came to a close, the market cut its losses, surging on the final two days of trading as legislators appeared to reopen fiscal stimulus talks.

Sector Scorecard

All 11 industry sectors were lower in September, with losses in Communication Services (−6.61 percent), Consumer Discretionary (−3.15 percent), Consumer Staples (−3.71 percent), Energy (−17.56 percent), Financials (−6.35 percent), Health Care (−3.87 percent), Industrials (−2.04 percent), Materials (−1.52 percent), Real Estate (−4.05 percent), Technology (−6.03 percent), and Utilities (−0.37 percent).3
 
 What Investors May Be Talking About in October

The housing sector has been a bright spot in a challenging year and has seen strong consumer demand thanks to historically low interest rates.
 
Home building and home sales have set new records in recent months, while home builder confidence is at an all-time high. The National Association of Home Builders/Wells Fargo Housing Market Index posted a reading of 83 out of a possible 100 in September, well above its previous record high of 78.4,5
 
Housing accounts for 15 percent of the nation’s gross domestic product, so investors may watch for the sector to retain its momentum in the fourth quarter and into 2021.6

​World Markets

International markets struggled amid more coronavirus cases in Europe and concerns over the tensions between the U.S. and China.

The MSCI-EAFE Index fell 2.20 percent in September.7
 
European markets were broadly weaker. France dropped 2.91 percent, Germany lost 1.43 percent, and the U.K. slipped 1.68 percent.8

Pacific Rim stocks were mixed as Australia fell 4.04 percent and Hong Kong declined 6.82 percent. Japan notched a solid gain, tacking on 9.68 percent.9

Indicators
​
Gross Domestic Product: The final reading of the second-quarter GDP showed an annualized decline of 31.4 percent.10

Employment: The unemployment rate dropped to 8.4 percent as employers added 1.4 million jobs in August.11

Retail Sales: Retail sales growth slowed in August, rising only 0.6 percent as the supplemental unemployment benefits expired at the end of July. The benefits helped buyers in prior months.12

Industrial Production: Industrial output rose 0.4 percent, below economists’ expectations of a 1 percent increase.13

Housing: Housing starts fell 5.1 percent after sharp gains in the previous three months. Single-family home starts increased by 4.1 percent, but the overall result was dragged down by a 22.7 percent decline in multi-family starts.14

Existing home sales rose 2.4 percent from July and were 10.5 percent higher than August of last year.15
Sales of new homes rose to their highest level in almost 14 years, posting a 4.8 percent increase from the previous month.16

Consumer Price Index: Consumer prices jumped 0.4 percent in August, led by the sharpest increase in the cost of used cars and trucks in more than 50 years. On a year-over-year basis, inflation rose 1.3 percent.17

Durable Goods Orders:  For the fourth straight month durable goods orders rose, increasing by 0.4 percent in August. New orders for nondefense capital goods, excluding aircraft, jumped 1.8 percent.18

The Fed

The Federal Reserve signaled that interest rates would likely not increase until 2023 following its two-day Federal Open Market Committee (FOMC) meeting that ended on September 16.19

Fed officials also stressed the importance of additional fiscal stimulus.19
​
Fed officials adjusted their outlook for unemployment, predicting it would average between 7 and 8 percent in the final three months of the year. Previously, Fed officials had expected unemployment of between 9 and 10 percent in the final calendar quarter of 2020.19

Gary G. Blom CRPC | Financial Advisor
Michael Howell MBA | Financial Advisor
Address: 3340 Tully Rd. Ste B4, Modesto, CA 95350
Website: www.blomandhowell.com
Office: (209) 857-5207 | Fax: (209) 857-5098
 
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Investment Advisory Services offered through SCF Investment Advisors, Inc.
155 E. Shaw Ave. Suite 102, Fresno, CA 93710 | (800) 955-2517 | Fax (559) 456-6109
SCF Securities, Inc. and Blom & Howell Financial Planning are independently owned and operated. www.scfsecurities.com​

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 Russell 2000 Index 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 Stock Exchange (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 CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalization in the FTSE Developed Europe Index. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. 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 S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Hang Seng Index 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 FTSE TWSE Taiwan 50 Index is a capitalization-weighted index of stocks comprises 50 companies listed on the Taiwan Stock Exchange developed by Taiwan Stock Exchange in collaboration with FTSE. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. 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.

CITATIONS:
1. The Wall Street Journal, September 30, 2020
2. MarketWatch.com, September 12, 2020
3. FastSet Research, September 30, 2020
4. CNBC.com, September 22, 2020
5. EyeOnHousing.com, September 16, 2020
6. Federation of American Scientists, October 2, 2019
7. MSCI.com, September 30, 2020
8. MSCI.com, September 30, 2020
9. MSCI.com, September 30, 2020
10. CNBC.com, September 30, 2020
11. The Wall Street Journal, September 4, 2020
12. The Wall Street Journal, September 16, 2020
13. The Wall Street Journal, September 15, 2020
14. CNBC.com, September 17, 2020
15. CNBC.com, September22, 2020
16. CNBC.com, September 24, 2020
17. CNBC.com, September 11, 2020
18. The Wall Street Journal, September 25, 2020
19. The Wall Street Journal, September 16, 2020

Here’s what you need to know about the housing market.
 
To some, this may hardly feel like an economy headed for a bright future. But don’t tell that to home builders.
 
Builder confidence in August jumped to an eye-popping 78 in August, according to the Housing Market Index courtesy of the National Association of Home Builders. To put that number in perspective, anything over 50 is considered positive.1
 
This past April, builder confidence plunged to 30 as the pandemic swept the nation. In August, the index hit the highest level in the 35-year history of the monthly series and matches the record set in December 1998.1
 
Due to the ongoing pandemic, many people transitioned to working from home at the beginning of the year. As 2020 wore on, and schools made plans to offer remote learning, many homes began to do triple duty as a space to live, work, and learn. With this in mind, the top requirements for buyers are hardly surprising: a home office, a garage, and greener backyards. In addition, record-low mortgage rates have made urban flight a reality for many.1,2
 
Remember, housing’s contribution to the Gross Domestic Product (GDP) can average as high as 18 percent, making it a critical barometer to monitor.3
 
We understand that a home is often the biggest financial commitment many can make. That’s why when it comes to your most important financial decisions—like buying your first home— we’d love to help.
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment.
 
Citations
1. CNBC.com, August 25, 2020
2. MarketWatch.com, August 25, 2020
3. NAHB.com, 2020