You have no doubt known that the income tax filing due date for 2019 was moved from April 15th to July 15th, as it was announced in multiple news sources. However, the news was not as well promoted that the last date for IRA, ROTH IRA, some additional qualified plans, and 529 College accounts was also moved to July 15th. So, let us announce it one more time: you can make IRA contributions for the tax year 2019 up to July 15th (as long as you had qualifying income) and still have the contribution count for your 2019 tax records. If by chance you wish to get those contributions in and counted for 2019 you still have time, but not much. Let us also remind you that some (but not all) states allow a state income tax deduction for your 529 contributions. If you’ve been meaning to add to your kids’ college fund through a 529 plan, do it now and take the Arizona state tax deduction for 2019.  Note that Arizona allows a state tax deduction of up to $4000 for joint filers and up to $2000 for single filers. Check with your own state for 529-related rules, or consult your income tax professional.

Ron’s Market Minute — It’s all about the Nasdaq!

A few of you have noticed that your investment accounts seem to be focused on equities from the Nasdaq Index* as opposed to the Dow Jones Index* or S&P500 Index*, and have thoughtfully asked ‘Why?’. So, as I’ve mentioned before, the Nasdaq Index looks NOTHING like the other major indexes, or the Mid-cap or Small-cap indexes either, for that matter. It’s really been in a world of its own. That’s ok for the short term. The media has certainly spent many of its articles trumpeting the monster stocks within the Nasdaq that only seem to go up. You know the names — Facebook, Amazon, Apple, Netflix, Tesla, Microsoft, Google, Nvidia and a couple of others. Earlier the articles sounded like no one should have considered owning anything but these Nasdaq stocks. Later we noticed articles comparing them to the dot.com era of the 90’s.  Neither of these comments made sense to us. This is not 1999 and the dotcom bubble that dominated that era, but it’s still (and always) dangerous behavior to concentrate all investments in any one small area. Remember the old saying that markets can stay irrational longer than investors can stay solvent.

Have a look at the year-to-date charts of the Dow Index in red, the S&P Index in green, and finally the Nasdaq Index in Blue. Not only did the Nasdaq stocks, as a group, manage to fall less than the other indexes, but it is the only major index that is sporting positive numbers (so far) for this year.

It’s obvious that at this particular time those Nasdaq darlings are hitting home runs. That said, this is not the 1990’s when companies with no assets, no cashflow, and no more than a neat idea (and perhaps a lot of eyeballs) were hitting the moon.

Today’s Nasdaq leaders are companies with a LOT of assets and cash flow, and many of them have become household names.  (Really, is there anyone who hasn’t heard of Apple or Netflix?)  So yes, these are today’s winners – but today’s over-emphasis on this small group of stocks isn’t necessarily positive. An emphasis is good, but when overdone it can have consequences. We do own them, but certainly not exclusively.  It’s always been a good idea to not put all eggs in one place (or basket), and we continue to believe that’s a good idea- and we continue to emphasize the winners while we diversify portfolios — although we really do like the gains our clients are seeing in their tech stocks!

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at lindaw[@]denkinvest.com. If you are receiving this commentary via email and would prefer not to please let us know either by email or phone.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

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