Stock Market Reaction to Expiring COVID-19 Programs | Charles Schwab

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Key Points

  • Stock markets around the world welcomed the COVID-19 fiscal stimulus programs; but now those programs are starting to expire.
  • If not extended or replaced, the fading support for the unemployed raises the risk of weakening economic momentum, turning the V-shaped recovery into a W. 
  • As investors seem to be discovering with international stocks outperforming in recent weeks, there are very different implications for U.S. and European workers.

Stock markets around the world welcomed the COVID-19 fiscal stimulus programs; the passage of the CARES Act in the U.S. in late March coincided with the start of the market rebound.

But now these programs are starting to expire. Key support for the unemployed in the U.S. and Europe is set to fade, raising the risk of weakening economic momentum and turning the V-shaped recovery into a W.

In the United States, an additional $600 per week for the unemployed expires July 31. The average unemployment payout without the CARES Act benefit is only $333 per week. Losing the extra $600 a week is like a two-thirds cut to income for 17 million Americans receiving state unemployment benefits. 

Investing implications

International stocks have outperformed U.S. stocks during six of the past eight weeks, including last week. One of the reasons may be the looming expiration of labor support programs and the different impact this could have on the unemployed in the U.S. compared with Europe.

https://www.schwab.com/resource-center/insights/content/stock-market-reaction-to-expiring-covid-19-programs

Social Security and Retirement

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Enjoying a comfortable retirement is everyone’s dream.  Social Security’s purpose is to help you secure your retirement dream.

According to the Social Security Administration, 9 out of 10 people over age 65 receive Social Security benefits. On average, Social Security counts for about 39% of total income during retirement. Thus,  as you can see, Social Security can’t cover all your financial needs and expenses during your retirement years.

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Furthermore, Social Security rules and decisions are complex.  And, it is a challenging task deciding when to claim your benefits.  When claiming benefits, it’s important to determine if it’s more financially beneficial to have income sooner by claiming it at early retirement age or wait as long as possible to receive a bigger benefit.

Social Security is part of the retirement plan for almost every American worker. It provides replacement income for qualified retirees and their families.  Social Security replaces a percentage of a worker’s pre-retirement income based on their lifetime earnings. The portion of your pre-retirement wages that Social Security replaces is based on your highest 35 years of earnings and varies depending on how much you earn and when you choose to start benefits.  However,  you can becoming eligible for Social Security benefits in retirement working for only 10 years.  You only need to accumulate 40 “credits” during your working life, and you can collect up to four credits each year.

Beach mimosaThe Social Security system works like this: when you work, you pay taxes into Social Security.  Social Security Administration (SSA) uses the tax money collected to pay benefits to:

  • People who have already retired.
  • People who are disabled.
  • Survivors of workers who have died.
  • Dependents of beneficiaries.

The money you pay in taxes isn’t held in a personal account (or lock box) for you to use when you get benefits. We use your taxes to pay people who are getting benefits right now. Any unused money goes to a Social Security trust fund that pays monthly benefits to you and your family when you start receiving retirement benefits.

There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different.

You can start receiving Social Security benefits as early as age 62 or any time after that. However, you are entitled to full benefits when you reach your full retirement age.  Full retirement age refers to the age when a person can receive their Social Security benefits without any reduction, even if they are still working part or full time. In other words, you don’t actually need to stop working to get your full benefits. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

If you start receiving benefits early, your benefits are reduced a percent for each month before your full retirement age.  The longer you wait, the higher your monthly benefit will be, although it stops increasing at age 70. Your monthly benefits will be reduced permanently if you start them any time before your full retirement age.

Create a retirement plan

Planning is the key to creating your dream retirement. You’ll need to plan and save for years to achieve your retirement goals. While many factors affect retirement planning, it is important to understand what Social Security can mean to you and your family’s financial future.

On average, retirement beneficiaries receive 35% to 40% of their pre-retirement income from Social Security. As you make your retirement plan, knowing the approximate amount you will receive in Social Security benefits can help you determine when to claim benefits and how much other retirement income you’ll need to reach your goals.

Although the are thousands of options, you can consider the below three basic strategies for claiming Social Security benefits.  When and how you file for Social Security can significantly impact your retirement income.  You can take Social Security benefits between ages 62–70 but it makes a big difference in the amount of money you get. At 62, you receive 25% less than if you wait for full retirement age. Also, this would affect you down the road since your annual cost of living adjustments will be based on a smaller figure. For those who wait until they are 70, they would receive 32% more than at full retirement age (based on 66 years young).

  • Full Retirement Age:  Full retirement age is the age when you will be able to collect your full retirement benefit amount. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960, until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67. You can find your full retirement age by birth year in the full retirement age chart.
  • Early Retirement Age:  You can get Social Security retirement benefits as early as age 62. However, your benefit is reduced if you start receiving benefits before your full retirement age. Understand how claiming retirement benefits early will affect your benefit amount.
  • Delayed Retirement Age:  When you delay collecting benefits beyond your full retirement age, the amount of your retirement benefit will continue to increase up until age 70. There is no incentive to delay claiming after age 70.

Types of Social Security Benefits

Social Security offers three distinct types of benefits for retired workers and/or their spouses.  In general, claiming strategies for couples will work to intentionally maximize each of the three types of benefits.

  • Retired Worker Benefit (which is based on his or her own earnings record) – Retirement benefits may be available as early as age 62. Your benefit amount is calculated based on a formula that incorporates your highest 35 years of earnings. If you claim benefits at Full Retirement Age, which varies from 66 to 67 based on your year of birth, you will receive your full benefit, which is known as your “Primary Insurance Amount” (PIA). If you claim early, you will receive a reduced benefit and if you delay, your benefit will be increased by 8% per year (pro-rated by months) of delay up to age 70.
  • Auxiliary Benefit (which provides a worker’s spouse or children with a benefit once the worker has claimed his own benefit) – The most common Auxiliary benefit for a married couple is the Spousal Benefit. Spousal benefits are generally available to the spouse of a worker who has been married to the worker for at least one year. The amount of the Spousal benefit is 50% of the worker’s Primary Insurance Amount if claimed at Full Retirement Age. Spousal benefits are reduced if claimed prior to Full Retirement Age, but do not increase if delayed past Full Retirement Age. When an individual is simultaneously entitled to both a Spousal benefit and a Retirement benefit, the Spousal benefit is reduced by the greater of the Retirement benefit or if a reduced Retirement Benefit is taken, the PIA.
  • Survivor Benefit (which provides a surviving spouse or certain other dependents with a benefit after a worker’s death) – The Survivor benefit is unique in that it is based both on when the deceased filed for benefits and when the Surviving spouse claims benefits. For example, if a higher wage earning spouse elects early, then dies, their spouse will be faced with a permanently reduced Survivor benefit, regardless of when they claim. If the higher wage earner delays claiming Retirement benefits, the available Survivor benefit is also increased.

Retirement Earnings Test for Social Security Benefits

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You are able to work and receive Social Security retirement, spousal, or survivor’s benefits. However, you may be subject to a reduction in benefits if you haven’t attained full retirement age.

The Social Security Administration (SSA) will withhold benefits during the year in which you work assuming that you provide an estimate to the Social Security office about your expected earnings. If you do not report estimated earnings, the SSA will withhold your monthly payments in the following year until all benefits that should have been withheld are paid in full.

Social Security benefits can be withheld and taxed

Social security (SS) benefits are subject to taxes. For retirees who are still working, a part of their benefit is subject to taxation. The IRS adds these earnings to half of your social security benefits; if the amount exceeds the set income limit, then the benefits are taxed.

In 2020, you are allowed to earn up to $18,240 before benefits are withheld. For every $2 you earn above the exempt amount, $1 dollar will be withheld. This applies to all years leading up to the year in which you attain your full retirement age. During the year you attain full retirement age the exempt amount increases to $48,600 and for every $3 you earn over the exempt amount $1 will be withheld.

Even though your benefits are withheld they are not completely lost. Once you reach full retirement age, your benefits will be increased to account for the number of months that you did not receive a benefit. For example, if your full retirement age is 66 and you filed for benefits at 62 you received a reduction in benefits for taking benefits 48 months early. If 12 payments are withheld due to the earnings test, your benefits will be adjusted at your full retirement age and it will be as if you elected at age 63, or 36 months early.

What  SSA considers income

If the retiree earns an income that exceeds the annual earnings limit, then the social security benefits are reduced until they attain the full retirement age. Note that investment income is not included in the annual taxable earnings. The only income involved comprises of wages or a salary earned from self-employment or when working for someone. For people who are self-employed only net earnings count. It is important to note that employee contributions to pension or retirement plans are included in gross wages.  Income that is not counted as earnings include:

  • Government benefits,
  • Investment earnings,
  • Interest,
  • Pensions,
  • Annuities; and
  • Capital gains

are allowed to withdraw your Social Security benefits after enrolling.

Beach mimosa

If you start taking Social Security benefits before full retirement age, you can withdraw your benefits within the first year of claiming Social Security, no matter what your age. You must pay back any money you received; the Social Security Administration then treats it like you never enrolled, and your monthly check can continue to grow until you start taking benefits again.

Early retirement age to claim Social Security benefits is 62.  Full retirement age is 66 for people born from 1943 to 1954 and gradually rises to age 67 for people born after that. You’ll earn an extra 2/3 of 1% for each month you delay after your birthday month, adding up to 8% for each full year you wait until age 70.

Every year you delay taking your Social Security benefits after age 62, you get a bump of 8% in your benefit until age 70.

Dependent children under the age of 18 or disabled before age 22 may be able to claim 50% of their living parent’s primary insurance amount (PIA} or 75% of their deceased parent’s PIA.

Social Security earnings are calculated the same way for most American workers  The maximum Social Security benefit depends on the age you retire. For example, if you retire at full retirement age in 2020, your maximum benefit would be $3,011. However, if you retire at age 62 in 2020, your maximum benefit would be $2,265. If you retire at age 70 in 2020, your maximum benefit would be $3,790.

Social Security Problems

Social Security is facing funding challenges, largely because people are living longer. Currently, the average 65-year-old American is expected to live approximately 20 more years, so Social Security has to support people for longer.

Also, Social Security works because people currently working pay into the trust fund from which retirees are paid. Over time, the ratio of contributing workers relative to collecting retirees has shrunk.  Because people are living longer and the ratio of people paying in has shrunk, the Social Security program will soon stop running a surplus, leading to potential problems down the road.

When you start collecting Social Security benefit checks may not make a significant difference with respect to the total benefits received. The system is designed for those who live average-length lives.  This means that the total sum you collect will be roughly the same no matter when you start collecting benefits. Thus, if you delay receiving benefits until full retirement age, you will collect fewer benefit checks than someone who starts collecting smaller checks early.

References:

  1. https://nationwidefinancial.com/nationwide-retirement-institute
  2. https://www.ssa.gov/benefits/retirement/planner/agereduction.html
  3. https://blog.ssa.gov/when-is-a-good-time-to-start-receiving-social-security-benefits/
  4. https://aginginplace.org/7-best-retirement-plan-options/
  5. https://aginginplace.org/are-there-taxes-on-social-security-for-seniors/
  6. https://www.fool.com/retirement/2020/06/13/7-hard-to-believe-social-security-facts.aspx

 

A Moral and Economic Imperative to End Racism

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The U.S. “has both a moral and economic imperative to end these unjust and destructive practices” of institutionalized racism. Raphael Bostic, President and CEO, Federal Reserve Bank of Atlanta

“Over the course of American history, the examples of such institutionalized racism are many, and include slavery, federal law (consider the Three-Fifths Compromise our founding fathers established to determine federal representation), sanctioned intimidation during Reconstruction, Jim Crow laws in southern states, redlining by bankers and brokers, segregation, voter suppression, and racial profiling in policing.”

Dr. Raphael W. Bostic, Federal Reserve Bank of Atlanta

“These institutions hurt not only the African Americans they’ve targeted, but the systemic racism they’ve codified also hurt, and continues to hurt, America and its economy. By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains this country’s economic potential. The economic contributions of these Americans, in the form of work product and innovation, will be less than they otherwise could have been. Systemic racism is a yoke that drags on the American economy.”

“To be fair, we have made some progress. Legal reforms have erased many of those historical institutions that caused so much pain and violence, and further reform essential for helping end harmful practices is under way in many places. But the legacies of these institutions remain, and we continue to experience misguided bias and prejudices that stem from these stains on our history. These have manifested in the worst way possible—in the deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Dana Martin, and, sadly, so many others.”

“It is time for this cycle to stop. It is time for us to collectively embrace the promise of an inclusive America, one where everyone can participate fully. We are each being challenged to rise to this occasion through education and action. All of us, especially our white allies, must learn the history of systemic racism and the ways it continues to manifest in our lives today. Furthermore, we all must reflect on what we can do to effect change at every turn.”

“A commitment to an inclusive society also means a commitment to an inclusive economy.”

To read the entire text: https://www.frbatlanta.org/about/feature/2020/06/12/bostic-a-moral-and-economic-imperative-to-end-racism

Dr. Raphael W. Bostic is president and chief executive officer of the Federal Reserve Bank of Atlanta. He is a participant on the Federal Open Market Committee, the monetary policymaking body of the Federal Reserve System.

COVID-19 Precautions

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Health experts continue to urge Americans to take precautions against spreading and contracting coronavirus disease 2019 (COVID-19) more seriously.

As of July 20, 2020, more than 3,784,900 people in the United States have been infected with the coronavirus and at least 140,300 have died, according to a New York Times (#NYT) database.

As COVID-19 infection numbers are surging throughout most of the United States, everyone, especially older adults over the age of 65 and others with pre-existing conditions, should take steps to protect themselves from getting and spreading COVID-19. In general, your risk of getting severely ill from COVID-19 increases as you get older. In fact, 8 out of 10 COVID-19-related deaths reported in the United States have been among adults aged 65 years and older.

Since there is currently no vaccine to prevent COVID-19, the best and most effective way to prevent contracting the illness is to avoid being exposed to this virus. There are more than 160 vaccines being researched, developed and tested against the coronavirus, and 26 vaccines are in human trials. Four (4) potential vaccines are currently in large scale phase III efficacy trials according to the New York Times.

Everyone is at risk for getting COVID-19 if they are exposed to the virus. The virus spreads primarily through respiratory droplets produced when an infected person coughs, sneezes or talks. These droplets can land in the mouths, noses or eyes of people who are in close contact with one another (within about 6 feet).

Recent studies have shown that #COVID-19 can spread by people who are asymptomatic (not showing symptoms). To arrest the community spread of COVID-19, you should:

  • Wear a cloth face mask to cover your mouth and nose in public settings and when around people who don’t live in your household.
  • Keep 6 feet (2 meters) of distance between yourself and people who don’t live in your household. It’s important to remember that infected people without symptoms are able to spread virus.
  • Avoid touching your face, specifically your mouth, nose or eyes.
  • Wash your hands often with soap and water for at least 20 seconds especially after you have been in a public place, or after blowing your nose, coughing, or sneezing.
  • Prioritize outdoor venues over indoor spaces if you must go out,
  • Clean and disinfect frequently touched surfaces daily.
  • Monitor your health daily and be alert for COVID-19 symptoms such as fever, cough, shortness of breath, fatigue, headache, or loss of smell.

How well a community as a whole does all of that could dictate how bad things get during the current resurgence.

References:

  1. https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html
  2. https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/older-adults.html
  3. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Long-Term Care Insurance and Aging

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Chances are that as you age, you may need long-term care at some point … one viable option: hybrid long-term care insurance.

Unfortunately, there is a stealthy stalker that could raid a retiree’s savings and destroy their financial security.  It’s the cost and expenses of extended long-term care — the assistance many retirees will need as they age to manage the tasks of everyday life, such as bathing, dressing and personal care. For those less ambulatory, this may also include transferring to and from a bed to a chair.

Long term care is care that you need if you can no longer perform everyday tasks by yourself due to chronic illness, injury, disability, or the aging process. It isn’t care that is intended to cure you; it’s ongoing care that you might need for the rest of your life. This means you may need help with activities of daily living, such as bathing, dressing, continence, eating, toileting, and transferring.  In general, traditional health insurance plans do not pay for the chronic, ongoing assistance with daily living that is most often associated with long term care.

The need for long term care can happen to anyone at any time. It can occur because of an extended illness such as cancer, a disabling event such as a stroke, a chronic disease such as multiple sclerosis or Alzheimer’s, or a permanently disabling automobile or sporting accident.

In many cases, however, retirees need long term care due to aging. As we live longer, into our 80s, 90s, and even beyond, health conditions that we’ve managed successfully for years may become worse. We may lose our ability to function independently on a day-to-day basis, resulting in the need for assistance.

Everyone should have a plan for long-term care. This could mean needing some extra help with everyday activities as you age. The benefits of long-term care insurance go beyond what your health insurance may cover by reimbursing you for services needed to help you maintain your lifestyle if age, injury, illness, or a cognitive impairment makes it challenging for you to take care of yourself.

According to AARP, 52% of people who turn 65 today will develop a severe disability that will require long-term care at some point in retirement.  The U.S. Department of Health and Human Services reports that 70% of people over 65 will need long-term care at some point in their lives.

“The older you are, the more likely you’ll need long term care.”

U.S. Department of Health and Human Services

A 2019 study by Georgetown University Medical Center reported: “Nursing home care is arguably the most significant financial risk faced by the elderly without long-term care insurance or Medicaid coverage.”

2019, the annual Genworth Cost of Care Survey found that the median monthly cost in the U.S. for long-term care was $7,513 for a semi-private room at a nursing home, $4,385 for a home health aide, and $4,051 for an assisted living facility.  Cost of care can be expensive and it’s important to understand the financial impact a few years of long-term care can have.

  • Nursing Home Care: The average cost of a year’s care in a private Medicare-certified long-term nursing home room is $104,000.4
  • Home Care: The average in-home care costs $49,920 a year for 40 hours of help per week.4
  • Assisted Living Care: A year in a 1-bedroom assisted living care facility averages $57,000 per year.4

long term care insurance claims paid for home care

Medicare and Medicaid

Many think that government programs such as Medicare and Medicaid will pay for all of their future long-term care needs. Surprisingly, they may only pay for some of these services and have many restrictions.

Medicare: May cover a maximum of 100 days of services after a hospital stay.2 Coverage is designed to assist people during a short-term recovery and doesn’t include personal care or supervision services.  Medicare won’t pay for what it calls “custodial care” unless you require skilled services or rehabilitative care, and even then, there are limits.

Medicaid: If you have limited assets and income and are relying on Medicaid, the state may make key care decisions on your behalf, including where you receive the care you need.  Medicaid won’t kick in unless your income is below a certain threshold and you meet minimum state eligibility requirements.

Traditional long-term care policies are becoming increasingly difficult to qualify for coverage. Premiums, which are lower if you buy in when you’re young, can increase and become unmanageable when you’re older. And, just like car, health or homeowners insurance, if you end up never needing the policy, you lose all the money you’ve paid in.

Hybrid Insurance

A hybrid insurance policy, also referred to as asset-based long-term care, combines long-term care insurance with permanent life insurance. A policy of this sort provides both living and death benefits.

You can purchase this type of policy with a single upfront premium, with a set of premiums for a fixed term or with ongoing premiums. If you need long-term care (due to age, illness, etc.), you can withdraw the funds from your life insurance policy, and when those funds run out, the insurance company will pay. If you don’t need care, or if you have some money left over after receiving care, your heirs will receive the remaining insurance benefit 100% tax-free.

Like all financial strategies, hybrid policies have pros and cons. The premiums can be higher compared to a traditional long-term care policy, and it’s important to be clear about what types of care will qualify under the policy you choose. But the underwriting process is typically less rigorous for a hybrid policy, and a couple can share one policy. This can make obtaining coverage easier and more affordable than a traditional policy.

As long as you pay your premiums, you’ll have a contractually guaranteed death benefit, guaranteed cash value and a guaranteed amount of long-term care coverage. And if, for some reason, you decide to cancel the policy, you can get most of your premiums back — once you pass a designated surrender charge period. That’s a way out that traditional long-term care insurance doesn’t offer.

Long term care insurance (LTCI) provide benefits to cover services you may need if you’re unable to care for yourself or your family, due to chronic mental or physical conditions.  Because there is no one-size-fits-all when it comes to long term care insurance, people must choose among policy options such as daily benefit amount, benefit period, and inflation protection options

One of the largest providers, the Federal Long Term Care Insurance Program (FLTCIP) is one of the largest LTCI programs and is available to all federal employees and military service members.  The Federal Long-Term Care Insurance Program is designed to reimburse for long-term care services at home or in a facility such as assisted living, adult day care or a nursing center.

Long term care insurance may be a smart way to protect your income and assets and remain financially independent should you need long term care services at home, in a nursing home or an assisted living facility, or in other settings.

References:

  1. https://www.kiplinger.com/retirement/long-term-care/long-term-care-insurance/601056/even-in-good-times-a-silent-stalker-can
  2. https://journals.sagepub.com/doi/abs/10.1177/1077558719857335?journalCode=mcrd&
  3. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
  4. New York Life Cost of Care Survey, 2018
  5. https://www.genworth.com/aging-and-you/finances/cost-of-care.html
  6. https://www.military.com/military-report/long-term-care-insurance.html
  7. U.S. Department of Health and Human Services. “The Basics,” https://longtermcare.acl.gov/the-basics/
  8. https://www.brownleeglobal.com/ltc-daily-benefit-amounts/

Microsoft Stock for Long-Term Growth and Safety

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Microsoft reports fiscal fourth-quarter earnings after the close on July 22.

Investors anticipate strong results from the company’s growing portfolio of cloud businesses, including Azure, Office 365 and Teams.

Microsoft Corp.  (MSFT) is expected to report adjusted net income of $10.6 billion, or $1.38 a share, on sales of $36.4 billion.

Shares of Microsoft have hit all-time highs. The software giant recently shut down Mixer, a videogame streaming service, because it wasn’t able to grow Mixer to serve the streamers it had hired to generate content and to bring followers.

EPA Approves Lysol as Effective Against the Novel Coronavirus

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The Environmental Protection Agency (EPA) has found Lysol Disinfectant Spray and Lysol Disinfectant Max Cover Mist to be effective against the coronavirus. The Lysol products are permitted by the EPA to claim that they can kill SARS-CoV-2, the virus that causes COVID-19.  Lysol Disinfectant Spray and Lysol Disinfectant Max Cover Mist are the first two surface disinfectant products the EPA has approved as effective against the novel coronavirus.

Lysol Disinfectant Spray can kill the virus “at 2 minutes of use,” per the release. This product was found to be more than 99.9% effective against the virus. The spray can be used throughout your home, on hard and soft surfaces.

The EPA’s approval recognizes that using Lysol Disinfectant Spray can help to prevent the spread of COVID-19 on hard, non-porous surfaces.

The two Lysol products are the first on the list for which the EPA has reviewed laboratory testing data and approved label claims against the novel coronavirus. In addition to the novel coronavirus, Lysol Disinfectant Sprays can kill 99.9% of the viruses and bacteria that families generally come in contact with every day. The disinfectants can be used to eliminate germs on commonly touched hard and soft surfaces.

References:

  1. https://www.today.com/health/two-lysol-sprays-first-disinfectants-proven-work-against-covid-19-t186106
  2. https://www.epa.gov/pesticide-registration/list-n-disinfectants-use-against-sars-cov-2-covid-19
  3. https://www.lysol.com/products/disinfectant-spray/lysol-disinfectant-spray-lemon-breeze/

Options Trading Mistakes | Trades Of The Day

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Most individual investors and traders know that they need to have a plan, manage risk, and put in the work learning and practicing. If they do that, they are well on their way to success.

What follows are six option trading and stock investing “don’ts” that will help keep you out of trouble and deliver returns when you trade.

Don’t place market orders – Use limit orders, which set the maximum price you are willing to pay to buy, or the minimum price you are willing to accept to sell. A market order tells your broker to execute your buy or sell order as soon as possible and at the current bid or ask price. That strategy works for liquid stocks where the bid-ask spread is highly competitive and you are likely to get the best price. However, most options are far less active and have fewer traders wanting to buy and sell.

Don’t chase a trade – Sometimes you will not be able to buy your option at your desired price. When this happens, do not keep raising your limit price. If you do, you may end up buying that option at too high of a price for the expected result or target price to be profitable. There will always be other trades coming your way, so stick to your plan.

Don’t over-trade – While adding to a winning position is often warranted, you should never add more than you are willing to risk. Never think that you can make up for a losing streak with one big score. That’s how gamblers get into trouble. If you even find yourself with a string of losers, stop trading. Take a breath. Think about what might have been the problem. After all that, you can consider making your next trade.

Don’t wait until the last minute to make your trade – Set a “good-til-canceled” limit price based on your profit target, rather than trying to time it near expiration. In other words, sell when price reaches your target, no matter when that happens before expiration. Strange things can happen at the end of a day. Especially at options expiration. Liquidity can easily dry up, and that means you may not be able to get a price anywhere close to what you were expecting. In addition, the time decay factor embedded in an option can cause its value to crater at the last minute.

Don’t trade without a plan – This is exactly the same as the “do” mentioned earlier. You’ve got to know your trading goals, expected profit and allowable risk. And you have to know what will have to happen to make you cut your trade short before a small loss turns into a big loss.

Don’t bet the farm – We’ve already discussed this in a few ways, but it is that important. Do not take such big risks that one losing trade will drain your account. And never think that you can make up for a string of losers with that one big win. Keep your position size between 2% and 5% of your portfolio. If the market gets exceptionally volatile, make that even smaller. You want to be sure you live to trade again tomorrow.

These 6 simple stock option trading rules can help keep your trading on track because the market owes you nothing and can be a ruthless teacher. Respect the market, and you will do just fine.

  1. https://tradesoftheday.com/2020/07/11/the-6-biggest-options-trading-mistakes-to-avoid/

12 Splendid Small-Cap Growth Stocks | Kiplinger Magazine

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Small-cap growth stocks could be ready to turn the corner after a few years of being outshone by large-cap growth, high technology peers.

As the U.S. economy starts to recover from the shock of COVID-19 forced shutdowns, small-cap growth stocks should benefit the most. That’s because they’re largely being valued at or near historical lows.  And, that’s good news for small-cap stocks, which have suffered significant under performance in recent years.

Once investors realize that small-cap stocks should have superior potential returns over the next two to three years, you’ll see small-cap stocks’ valuations and their prices rise.

Read More:  https://www.kiplinger.com/investing/stocks/small-cap-stocks/601067/10-splendid-small-cap-growth-stocks-to-buy

UPWORK

  • Market value: $1.6 billion
  • YTD total return: 30.0%
  • 3-year annualized revenue growth: 22.3%

Upwork (UPWK, $13.87) went public on Oct. 3, 2018, at $15 a share. In the 21 months since, the online marketplace that connects freelancers with clients has delivered losses to its IPO investors.

However, despite falling to a 52-week low of $5.14 per share in April, it’s beating the S&P 500 handily year-to-date. That’s thanks in large part to an 85% run over the past three months.

The company has gone through some rotation in the C-suite. In December, then-CEO Stephane Kasriel stepped down from the top job after leading the company since April 2015, long before it became a public company. Taking over as CEO was Hayden Brown, the company’s chief marketing and product officer.

In 2017, the last full year before Upwork went public, it had annual revenue of $202.6 million. Two years later, Upwork reported annual revenue of $300.6 million, 19% higher than in 2018, and 48% higher than in 2017. Analysts continue to expect double-digit revenue growth this year and next.

Wearing Masks Prevents COVID-19 Spread

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Face masks can play an important role in preventing the spread of the coronavirus from infected persons respiratory systems. Masks form a literal barrier to stop particles from getting into the air and spreading to others.

Scientist Bill Nye “The Science Guy” is urging everyone to wear a mask in the fight to stop the spread of the coronavirus.  He states that the mask is extremely effective at preventing “particles from your respiratory system from getting into my respiratory system” and vice versa.

The Centers for Disease Control and Prevention (CDC) has recommended everyone wear a (cloth) mask to prevent infected people passing on the infection. It is not intended to prevent the wearer getting infected.

There are several possible routes to infection:

  • An infected person can cough, sneeze or breathe while within about two metres of another person, and the virus lands in the other person’s eyes, nose or mouth.
  • Another route is when an infected person coughs or sneezes onto their hand or onto a surface. The uninfected person then shakes the hand or touches the surface, and transfers the virus to their own eye, nose or mouth.
  • It is possible that an infected person can also cough or sneeze to create an airborne spread beyond the close contact range – but it is controversial whether this last route is a major means of transmission.

Masks with eye protection appear to work best because coronaviruses can enter the eyes and travel to the nose and into the respiratory system.  Thus, masks combined with goggles appear to provide complete protection in laboratory experiments.

Masks protect effectively others from the virus that might have been spread by an infected mask wearer and may prevent the spread of viruses from the wearer.

Masks reduce the amounts of droplets and aerosols spread when an infected person coughs or sneeze.  Ill people who don’t wear a mask and “well” people who have no symptoms but are still carrying and spreading the virus are the reasons people should wear masks while in public.

Wearing Masks

Wearing masks does appear to reduce the spread of the infection to others.  Everyone with any respiratory symptoms must wear masks in public. This requirement could supplement other strategies such as social distancing, testing, tracking and tracing to reduce transmission.

To capture infected people without symptoms, we could ask everyone to wear masks in public spaces. Masks could also be required at some outdoor crowd events, such as sporting events or concerts.

Many medical experts know that the best practices for controlling an infectious disease like COVID-19 include keeping six feet apart from others, washing your hands regularly, and, wearing face masks in public.

  1. https://news.yahoo.com/bill-nye-demonstrate-face-masks-184448520.html
  2. https://www.sciencealert.com/this-is-why-advice-on-whether-you-should-wear-a-mask-is-just-so-confusing