2020 Recap – The GOOD

Happy New Year! I hope you and your family/friends were able to make the most of our situation known as “2020” to include the holiday season.

At the risk of sounding cliché, the year 2020 will be remembered throughout history as one of the most unpredictable and challenging years of most people’s lives. Thanks to the unending “Breaking News” and Social Media we are very much aware of all the “bad” that is 2020. For this reason, I wanted to focus my 2020 Recap on some of the “GOOD” and a reminder of our time-tested core investing principles through lessons learned from 2020.



  • Strong stock market returns – March showed us the fastest bear market experienced in history when the S&P 500 dropped 34% from its all-time highs in 23 days. In the past this kind of decline took on an average of 11 months to occur. But the GOOD is it took just 4 months for the market to increase to new highs making it the fastest recovery on record from a bear market.  As of December 30, the S&P 500 was up 17.63% for the year.1
  • Largest rise in 3rd quarter GDP – The economic result of the reopening of the economy saw the largest growth in gross domestic production (GDP) for the 3rd quarter in 2020. This equated to 33% annualized. A reminder here is that the U.S. economy is driven by services and consumers.2
  • Federal Reserve immediate action – Lessons learned from the ‘08/’09 financial crisis led to the Federal Reserve’s (Fed) immediate action geared towards providing liquidity and funding to consumers and businesses alike. This was done by dropping “policy rates” and implementing its full range of tools. Per Chairman Powell, the Fed is “not even thinking about raising rates,” suggesting that rates will stay low for at least a couple years.3
  • Low-interest rate environment – Low-interest rates drive investors to the stock market looking for returns. Additionally, this environment dropped the average rate on the 30-year fixed mortgage below 3%, giving homeowners an opportunity to refinance as well as increasing the overall housing market.

Broad Range of Subjects:

  • COVID-19 Vaccines – In January, Chinese scientists shared the genetic code of this new unknown virus with the world and the race was on to develop a vaccine. What was developed was a totally new kind of vaccine using Messenger RNA (mRNA). The mRNA vaccines from Moderna and Pfizer were developed, trialed and approved in record time of less than 12 months and with an effective rate of over 94%.4
  • Creativity/Entrepreneurship – Given the required quarantine, many people and businesses took to new ways of communicating and conducting business. Zoom and FaceTime calls replaced the traditional Happy Hour/Sunday Brunch and even wedding ceremonies. Advances were made in telehealth, remote work and other virtual work gatherings that may continue even after the pandemic. In an effort to get out of the house, many of us took advantage of outdoor activities causing crowded hiking trails and bike sales through the roof.  Pop-up events empowered entrepreneurs. They provided us an inventive way to go to the movies and see local concerts creating a sense of community even in the big cities.
  • SpaceX – On May 30, 2020 SpaceX launched 2 United States astronauts to the International Space Station on a U.S.-made rocket for the first time in nearly a decade. This marked the potential of a more cost-efficient space travel program reducing/eliminating our dependence on Russian technology. 5
  • Carbon Emissions – As reported by CNBC, the quarantine caused a significant decrease in transportation activity directly impacting carbon dioxide emissions. The U.S. experienced the largest decline at 12%. Another factor is the decrease in cost of renewable energy sources which has declined quicker than expected. 6

Investing Lessons Learned

Even in a year like 2020, our investing principles held true when navigating the uncertainty experienced in the markets. At Maxima Wealth Management our investment approach is called Structured Asset Allocation. The principal theories of Structured Asset Allocation are not new. They are time-tested and supported by decades of empirical research. Below are five principles reinforced from what we experienced in 2020.

  • Long-term view – Your personal financial goals/objectives should determine your investment decisions for the long-haul, not the day-to-day headlines. Focusing on this helps keep you invested during times of uncertainty.
  • Disciplined approach – Sticking to your plan and honoring your personal risk tolerance and time horizon ensures a disciplined approach. Monitoring the structure of your portfolio and reallocating over the course of the year can help properly position portfolios.
  • Market volatility opportunities – History shows us that extreme volatility doesn’t last long and is followed by positive returns. This can provide long-term investment opportunities to buy quality companies at lower prices.
  • Diversification – Being properly diversified can stabilize a portfolio and this still holds true. Holdings in bonds/bond mutual funds provided a less volatile portfolio.
  • Leading indicator – Stock markets are forward looking and provide an indication of what is expected in the future economic environment. Keep in mind this could be a short-term look and one should take a long-term perspective aligned with your personal financial goals/objectives.

Maxima Wealth Management

A big welcome to our new clients. We are excited you joined our team and will continue striving to exceed your expectations as your trusted financial advisor. 

A sincere thank you for everyone’s continued partnership and confidence. Please know we are your financial advocate and will continue to work diligently to provide you with the highest quality of service and guidance. Maxima Wealth Management is invested and committed to you and your goals. May you be content, wealthy and wise in the year ahead. I wish you a successful and memorable 2021.


Michelle Lee Wagner

1 https://www.slickcharts.com/sp500/returns

2 https://www.cnbc.com/2020/12/22/us-gdp-q3-2020-final-reading.html

3 https://www.cnn.com/business/live-news/stock-market-news-061020/h_213d00641eab8aacc55ff33db99a1421#:~:text=We’re%20not%20thinking%20about,interest%20rate%20increase%20until%202022.

4 https://www.biospace.com/article/a-timeline-of-covid-19-vaccine-development/

5 https://www.bbc.com/news/science-environment-52855029

6 https://www.cnbc.com/2020/12/11/covid-record-drop-global-carbon-emissions-2020.html

The CARES Act – What Does It Mean for the Individual or Small Business Owner

I know, I know not another article on the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The 880-page stimulus package was just signed into law on March 27, 2020 and already there have been numerous summaries written. My goal for this blog is to provide you an easy to read summary of the provisions that may impact you as an individual or small-business owner.

Before I get into the academics of the CARES Act, I want to take this opportunity to acknowledge the uncertainty the coronavirus has caused. This uncertainty may include that with the health and safety of you and your family, your employment situation, your financial/retirement situation, and many other areas of your life. Bottom line, right now you may find yourself in a place of uncertainty. If this is the case, please feel free to reach out to me. Taking action allows you to take back control and this action could simply be educating yourself on your personal situation.

In response to the Coronavirus global pandemic, aka COVID-19, the U.S. Congress passed the CARES Act. This $2 trillion package was passed to help ease the economic blow experienced by families and businesses.

The following is a brief review of the provisions I feel to be most noteworthy to individuals and small-businesses. This is not a complete review, but it is a gathering from four different reliable sources1.

Individual Provisions:

Individual Recovery Rebates

The CARES Act provides up to $1,200 stimulus check to eligible adults earning up to $75,000. Married couples filing a joint return and earning up to $150,000 will receive up to $2,400. This is based on 2019 adjusted gross income (or 2018 AGI if you haven’t yet filed your 2019 tax return).2 https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-HCCF2DA7CBD6341059EAB97C24489743B Eligible families (individual and joint filers) receive an additional $500 for each child under the age of 17. As with typical refundable tax credits, this potential stimulus payment begins to phase out when a taxpayer’s income exceeds their applicable threshold. For those taxpayers who’s 2018/2019 AGI exceeds the threshold, but then in 2020 meets the criteria based on loss of income, the Act directs the payment. Yes, this means you will get the stimulus check, but much later. Interestingly, there won’t be a “clawback” for those who end up making more in 2020 than they did in 2018/2019.

It is a good time to mention that prior to the signing of the CARES Act, the 2019 filing deadline was extended to July 15, 2020. If your 2019 AGI meets the applicable threshold and your 2018 exceeds it, you may want to ensure you file your 2019 taxes as soon as possible to try to get it to the IRS before they calculate the stimulus payment. Also, it’s important to mention, 2019 IRA/ROTH/Health Savings Accounts (HSA)/Medical Savings Accounts (MSA)/Coverdell Education Savings Account contributions are all extended along with the filing extension.

That being said, per the U.S. Treasury Secretary Steven Mnuchin payments should go out within three weeks (as of March 27, 2020)3. In an interview on CNBC on March 29, 2020 the Secretary said payments will go out by April 16, 2020.

COVID-19 Related Retirement Distributions

Another relief provided which actually is similar to Federally declared disasters, is the waiver of the 10% early distribution penalty up to $100,000 of 2020 distributions from IRAs and employer-sponsored retirement plans for those impacted by COVID-19 (qualified individuals). The income tax is due, but it can be spread out evenly over 3 years. And the day after receipt of said distribution, one has up to three years to “roll back” all or any portion of the distribution back into a retirement account; thereby, eliminating the tax paid for the distribution. This may require an amended tax return. For employer-sponsored retirement plans, loans can be taken by “qualified individuals”. The maximum amount of the plan loan is increased to the lesser of $100,000 or 100% of the account balance and it applies to loans taken 180 days from the Act’s date of enactment.

As defined in H.R. 748-CARES Act (a)(4)(A)(ii), a “qualified individual” is one:

  • who is diagnosed with COVID–19 by a test approved by the Centers for Disease Control and Prevention,
  • whose spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or
  • who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).
Required Minimum Distributions (RMD) Waived

For those not in need of income the CARES Act suspends RMDs during 2020. This applies to retirement account owners and beneficiaries taking stretch distributions. This is a big help because RMDs are based on the account value at the end of the previous year (December 31, 2019). Without this specific relief, retirement account owners would be forced to withdraw and pay tax on a higher percentage of their current IRA balance.

This subject warrants a more detailed discussion with your personal financial advisor given your specific situation. Please reach out to me if you’d like to discuss your situation.

Student Loan Deferral

There are several provisions geared to provide relief to student loan borrowers, the main one I want to address is the temporary relief for Federal Student Loan Borrowers. In general student loan payments on Federal student loans are suspended through September 30, 2020. During this time, no interest will accrue. By default, payments will continue unless individuals take proactive steps to contact their loan provider and request a pause in payments.

Again, if you want to discuss this area more in depth and specifically to your situation, contact me directly.

Health Care Provisions

The definition for “qualified medical expenses” for HSAs, MSAs, and Healthcare Flexible Spending Accounts (FSAs) is expanded to include over-the-counter medications.

Additional personal healthcare provisions include:

  • Medicare beneficiaries will be eligible to receive the COVID-19 vaccine (when available) at no cost
  • During the COVID-19 emergency period, Medicare Part D recipients must be given the ability to have up to a 90-day supply of prescribed medication (must request)
  • Telehealth services may be temporarily covered/relaxed (contact me if you’d like to discuss)

Small Business Provisions:

Paycheck Protection Program/Forgivable Loans

This program is a partially forgivable loan program provided by the Small Business Administration (SBA). One must apply for this loan by June 30, 2020 and have a maximum maturity of 10 years. To qualify the business (to include sole proprietorships) have fewer than 500 employees (with a few exceptions)4. Eligible borrowers are required to certify by good-faith that the loan is necessary due to the “uncertainty of the current economic conditions” caused by COVID-19.

Under this program, the loan may be used to pay for a variety of expenses to include:

  • Payroll
  • Group health insurance premiums/other healthcare costs
  • Salaries/Commissions
  • Rent (business)
  • Mortgage interest (does NOT include pre-paid)
  • Utilities
  • Other business interest incurred prior to February 15, 2020

The most significant potential benefit of a loan provided from this powerful program is the possibility of having all or a portion of it forgiven. The amount eligible is the amount actually spent (during the first 8 weeks after the loan is made) on:

  • Payroll (excludes prorated amounts for individuals with compensation over $100,000)
  • Rent (lease in force before February 15, 2020
  • Utilities
  • Group health insurance premiums/other healthcare costs

Now there is a particular requirement to for the above to be forgiven. The business MUST maintain the same number of employees from February 15, 2020 through June 30. 2020 as it did in the same period in 2019 or from January 1, 2020 until February 15, 2020. If this requirement is not met, the amount eligible for forgiveness is reduced (additional reductions may also apply).

This is definitely a good time to discuss your personal situation with me or your personal financial advisor as there are additional benefits to this program and it can get confusing.

Employee Retention Credit

If a small business is not receiving a covered loan as defined in the SBA Section 7(a)(36), the CARES Act provides a new payroll tax credit. A thorough review of the CARES Act is recommended to see if your company is eligible for this credit.

Deferral of Payment of Payroll Taxes

Another payroll-related tax break is the ability to defer payroll taxes from the date of enactment of the CARES Act through the end of the year, and until the end of 2021 and 2022. Again, employers are NOT eligible if they have debt forgiven by the CARES Act for certain SBA loans.

As I stated in the beginning, the CARES Act is an 880-page document and there are a number of other provisions I opted not to address. There is assistance provided for unemployment insurance expansion, aid for states and municipalities and aid for large companies.

Given the number of benefits/programs provided in the CARES Act that may impact you or someone you know, I highly recommend taking this time to check in with your financial advisor and discuss your personal situation.

 To learn more about how we can help you, contact us today!

Blog Sources

1 https://www.kites.com/blog/analyzing-the-cares-act-from-rebate-checks-to-small-business-relief-for-the-coronavirus-pandemic/;




2 https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-HCCF2DA7CBD6341059EAB97C24489743B

3 https://www.bloomberg.com/news/articles/2020-03-26/when-and-how-will-i-get-that-1-200-stimulus-payment-quicktake

4 H.R. 748-CARES Act Sec. 1102. (a)(2)(D)(i)/(ii)/(iii)/(iv)

Stay the Course Amid Uncertain Times

So much uncertainty being felt in the U.S. and around the globe surrounding a number of different issues, but especially right now with the spread of COVID-19. This is first and foremost upsetting from a human perspective, but then its exacerbated when we watch how the financial markets respond and see our retirement accounts lose so much ground.

At Maxima Wealth Management, it is a fundamental principle that markets are developed to contend with uncertainty, reacting in real-time as it sorts out and responds to all available information. Believe it or not, the recent declines actually demonstrate a functioning market.

While the markets are reacting to all new information as it continues to become available it is also pricing in possible unknowns. During increased uncertainty the risk associated is also heightened. This leads to an increase in returns that investors demand to assume that risk, which drives prices down.

No one can tell you exactly when the markets will turn around or by how much. We do know based on three similar historical events (SARS, Ebola, H1N1) strong evidence shows that markets rebounded quickly and decisively.1

As illustrated in the video link by Dimensional Fund Advisors below, what’s important is “Tuning Out the Noise” and don’t lose sight of your long-term investment plan. This is a time you may recognize the value of your financial advisor.


A trusted financial advisor will work with you to establish your personal investment plan that incorporates your personal risk tolerance and time horizon. Implementing this will create a portfolio allocated in a manner that is comfortable for you, with the understanding that uncertainty is a part of investing and the need to stay the course may ultimately lead to a more pleasant and beneficial investment experience.

At Maxima Wealth Management we assist our clients in developing a plan that meets their individual needs, we offer a structured, unemotional and highly diversified investment approach addressing risk management and helping you stay the course.

To learn more about how we can help you, contact us today for a consultation!

1 https://www.marketwatch.com/story/heres-how-the-stock-market-has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22

What Can a Financial Advisor Do for Me?

You may have noticed that many “financial” or “investment advisor” blogs conclude their articles with the recommendation to seek advice or guidance from a financial advisor; I know I do. This is sometimes recommended because there are a number of complicated issues in which a financial advisor is specifically educated and licensed. Also, the term “financial advisor” is used by a wide variety of professionals with a number of difference licenses and/or certifications.

Below is a comprehensive list of services a financial advisor might offer. When deciding which financial advisor will meet your needs, I recommend that you know what services they provide and understand their ideal client. Choosing your financial advisor is a very personal decision and I believe an important long-term partnership.

Below is an example of financial advisor services and their corresponding questions that may be answered:

Retirement Planning 

Where do you want to live when you retire? Are you financially ready to retire? How will you take your distributions from your retirement accounts?

Investment Management 

Is your investment portfolio allocated according to your risk tolerance and time horizon? Should considerations be given to selling investments to recognize tax losses?

Insurance Services 

Do you have the proper amount of insurance in all areas at risk? What options do you have with existing insurance policies?

Financial Planning

Is your plan comprehensive? Does your plan help you attain a full life?

Estate Planning

Do you have the proper estate planning documents in place for your situation? Have you reviewed who you’ve identified as your beneficiaries?

Education Planning

How much do you need to save to fund higher education for your children or grandchildren? What vehicle provides the best advantages for saving?

Business Owner Solutions

What is the best retirement plan for my business? What is the best vehicle to prepare for ownership transfer?

Most financial advisors initially meet with you to discuss your goals and objectives. This helps with establishing a plan to meet your needs. Once the plan is developed and implement, you should expect to meet with your advisor on an ongoing basis (i.e. quarterly, semi-annually or annually) depending on your needs to ensure success. Additionally, you should expect to receive regular communication on the progress of your financial goals/objectives.

Financial Advisor Qualifications

Unfortunately, there isn’t just one educational degree, regulatory license or professional certification required to be a Financial Advisor. The following is a breakdown of the different distinctions:

Educational Degrees – This is wide-ranging and may include a Bachelors, Masters or even a PhD degree.

Regulatory Licenses – These are required to sell and give financial advice for particular investments (stocks/bonds) or insurance products. The most popular licenses are the Series 6, 7 and 65.

Professional Certifications – The two most popular certifications are the CFP® (Certified Financial Planner) and the CFA® (Chartered Financial Analyst). A CFP® has been recognized by the CFP® Board of their expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement. A CFA® has been recognized by the CFA® Institute of their competence to pass three levels of exams on accounting, economics, ethics, money management and security analysis.

The main distinction between the two certifications generally comes down to the fact that a CFP® works with individuals to accomplish their financial goals/objectives and a CFA® focuses on investment management/analysis in large-scale money management corporate situations (i.e. mutual fund companies).

In summary, a financial advisor can help assist you with everything from identifying your financial goals/objectives, implementing your financial plan, and strategically plan for life events. Choosing a financial advisor is a very personal decision and I believe in the importance of establishing a strong, trusting relationship between the client and advisor.  However, it is your responsibility to determine your needs and understand what is most important to you in identifying the best financial advisor for you.

If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.

Key Personal Financial Decisions: Debt Management

As I was considering the next topic for my blog a particular theme kept presenting itself: Key Personal Financial Decisions. So, I’m going to go with it. Over the next couple months my blog will cover the following Key Personal Financial Decisions: Buy or Rent; Career/Education; Dependents; Risk Management; Do I Need a Plan; and today’s topic Debt Management.

Whether you have a small or large amount of debt, it all requires some way to manage it. This could mean making payments and ensuring it doesn’t get out of control or employing a more developed plan.  I know this topic is presented as a topic under Key “Personal” Financial Decisions, but I want to challenge you to put yourself in the role of Chief Financial Officer (CFO). You are now the CFO of your family, regardless of whether it’s a single or multi-member family.

5 Steps to Debt Management Plan

The next 5 steps will guide you through the process of creating your own debt management plan.

As stated on investipedia.com, “a CFO is the senior executive responsible for managing the financial actions of a company”. If you can separate yourself from the emotions and assume the role of CFO when developing and implementing your Debt Management Plan, you will be successful and meet your goals and priorities.

1. Review Your Goals & Priorities

One of the first steps in the financial planning process is defining your goals and objectives. The same is the case in developing your debt management plan. Take time to review your financial goals and priorities. If you don’t know what your goals and priorities are, then you have a little work to do. It may sound like a painful process, but you can have some fun with it. Take this opportunity to explore and understand what your values, lifestyle and attitudes around money are and then translate those into where you want to be financially in 3 to 5 years.

2. Assess Your Current Budget/Situation

The next step is to assess your current situation as it relates to your budget (income/expenses). If you’d like a little help, follow this link to a budget spreadsheet I use with my clients. Use this to show exactly what you spend, feel free to personal it to meet your needs (rename categories) and try to be honest. The objective is to identify where you are spending your money and areas you can reduce expenses, if necessary. Through this exercise, most of my clients find they have expenditures they can eliminate immediately.

3. Create Income/Reduce Expenses

Now you get to brainstorm on options to either increase your income or reduce expenses. On a piece of paper create 3 columns and title them: Increase Income/Reduce Expenses/Liquidate. Now brainstorm for 10 minutes and try to come up with 5 ideas for each column.

Are there ways for you to earn more income? Maybe you can turn a hobby into a side-gig? Can you pick up an extra shift? Or, challenge yourself and set your sales goals higher.

Perhaps you are living beyond your means. Reducing expenses might even mean a life change, i.e. move to a less expensive living situation. This is when your budget really helps. It can actually show you areas you might be able to or willing to reduce or eliminate all together.

Liquidate or downsize your assets might be the last draw, but you might actually have an asset you’re willing to sell. Maybe it’s time for a yard sale or do you really need 3 vehicles?

4. Forecast and Make Adjustments

Forecasting is not an exact science, so you can’t really make any mistakes on this step. Admittedly, this step becomes most effective after you’ve been budgeting for a while and perhaps once you’ve made some changes as brainstormed above. If you’ve made changes they should affect your cashflow and then you can forecast what the future looks like which may allow you to allocate more funds towards paying off debt.

5. Monitor Progress

Monitoring your progress is the final step of your Debt Management Plan, similar to the Financial Planning Process. This task enhances the opportunity of meeting your goals and priorities. It’s an ongoing step and is best if you congratulate yourself when you’ve reached a milestone (i.e. paid off the first credit card).

In conclusion, there is actually one last step…recognize when you need help. Need help? I would love to speak with you about your personal debt management or financial plan. Please request a consultation!

Also, if you know someone who would benefit from a financial advisor, please send them my contact information along with this blog.

Take a Vacation! 5 Steps to Plan your Vacation Fun and Budget

Now that your taxes are complete, you may feel you are ready for a vacation. Well, it’s actually a good time to start planning if you want a summer getaway.

Vacation budgets mean less stress

Too many people wait to start planning their vacation. Planning without a budget can cause higher costs, more stress, and an overall disappointing experience. If you can start your planning sooner rather than later you will ensure a fun, relaxing retreat.

Below are five categories or steps I recommend considering when planning for a vacation. They don’t necessarily need to be completed in any specific order; however, answers to certain questions may have an impact on your overall plan.

Step One -Vacation Buddies

First, who will be joining you on this getaway? I think this is the most important task. Determine who you will be vacationing with – significant other, kids, college friends, extended family or a mixture. Understanding this will guide you through the other steps in the planning process.

Step Two – What Kind of Vacation?

Second, what are you going to do? What do you want out of your vacation? Perhaps you want to take a “big” trip or maybe several “mini-vacas” makes more sense. You may even decide to do a local vacation, also known as a “staycation”.

Step Three – Where to Go?

Third, specifically where do you want to go? Perhaps it’s a country, city or an event. The answer to this question may lead to additional questions, such as what activities do you want to do. Perhaps you want to travel to a country and go on a long, planned hike or maybe you would prefer going to the coast and lay on the beach.

Step Four – Vacation Time and Accommodations

Fourth, when do you want to travel and for how many days? This is important do determine so you can get a jump on the last question addressing travel and accommodations. It can also prompt you to research the expected weather for the area you want to travel as well as special events/festivities that may be occurring during the time of your vacation.

Step Five – Vacation Budget or Fund

And fifth, how? How much are you willing to spend? How are you going to get to your chosen location? If you are spending the night, what are your accommodations going to be? It’s never too soon to start a “vacation fund”. Create a budget and figure out how much you need to contribute each month to have that amount ready before the vacation date arrives.

Travel and accommodations are the biggest items to address and the sooner you start researching for the best deals the better. Keep in mind you may be able to utilize mile rewards versus paying cash but remember the number of points needed is based on the dollar value of the ticket and ticket prices can go up as the plane fills, so booking early is important.


We all hope vacations are about relaxing and enjoying special time with family and friends. I want you to return from your vacation well rested, with great memories and less stress. Plan today so your retreat tomorrow is exactly how want it to be.

If you’re unsure as to where to begin, or you have not created a financial plan with vacations budgeted into your plan, consider requesting a consultation with me for productive savings ideas and assistance with getting started.