Photo of Ray Ferrara CFP Ray Ferrara CFP Aug 31, 2021


On Monday, August 23rd, the U.S. Food and Drug Administration (FDA) announced the approval of Pfizer-BioNTech’s COVID-19 vaccine for individuals 16 years of age and older. Now marketed as “Comirnaty”, it’s the first FDA-approved vaccine for the prevention of COVID-19 disease and represents a milestone in the pandemic war. While not as monumental as the first “Pfizer Monday” on November 9th of 2020, the approval announcement gets us closer to normality and the markets reacted accordingly. The S&P 500 was up a respectable 1%, but assets more levered to an economic recovery were even better, with small-cap stocks up 2%, airlines and cruise lines up 3-4%, and oil up 5%.

The expectation is that more corporations and schools will now mandate vaccination, and individuals will be more comfortable getting the shot, aiding efforts to attain herd immunity and fight back against the Delta variant. The FDA will likely approve other vaccines in short order and we should expect other nations to follow suit. Full FDA approval just nine months after the announcement of successful phase 3 trials is a record-setting approval period. Still, the efficacy of vaccines against new strains of the virus is yet to be known and the markets will continue to fluctuate as investors attempt to price that risk. While the pandemic war is not over, this approval is a battle won for both health science and the economy.


We reported earlier that Social Security beneficiaries would be getting a nice bump this year because of inflation. Just last month it was projected to increase by 6.1%.  But with the inflation news from last month showing a 5.4% increase, the new projection is 6.2%. This would be the largest increase since 1983, when the bump was 7.4%. It is possible the amount could go higher, but unlikely to surpass 1983.


The unofficial end of summer is this weekend. For whatever reason, September is historically the worst month for the stock market, and October is known for its big drops. There is much to be worried about and the talking heads will be there to remind us about everything negative in the coming weeks. Be steadfast because beyond the day-to-day so-called bad news, it is hard to see anything but the economy doing well the rest of this year and into next.

The Fed is almost sure to announce a tapering of the bond-buying between now and the end of the year. This, along with a strong economy, will likely raise interest rates over the next 12 to 15 months. Although money will cost more on a historical basis, a 2.3% 10-year Treasury and 4% mortgage rate, which is the current consensus, is still pretty cheap – just not as cheap as it is today. Inflation will likely moderate from its hot pace of 2021, finally settling into a 3-3.5% range. Short-term rates are not likely to rise until late next year, or more likely early 2023.

Corporate earnings this year should finish 20% above last year’s earnings. Next year will see about half of this kind of increase which is amazing given the comparison to 2021. There will still be plenty of liquidity with all the cash reserves that have built up over the past 18 months for both individuals and companies. This doesn’t even count the money that both the federal and state governments will be spending.

Speaking of spending, there will still be plenty of pent-up demand from the pandemic with consumers leading the way once again. They will be spending money on everything with their savings and credit cards. They will also be empowered with higher wages which will likely be up 3-3.5% next year on top of about 4% this year. So, Charlie Brown, go play football with Lucy.


Everybody is cautioned to not drink and drive. It can lead to a DWI with a fine, penalty, loss of license, jail, and even death. But have you ever heard of a TWI? No? It stands for Trading While Intoxicated. MagnifyMoney recently did a survey of 1,116 investors age 18 to 75 that was designed to measure an investor’s emotions while investing. Part of the survey asked if the investor ever traded in the markets while intoxicated. Amazingly, 32% said “yes,” including a whopping 59% from the Gen Z group. Two-thirds of those surveyed indicated they regretted making a rash emotional decision, millennials and Gen Zers being more likely to have made such a decision. 47% admitted it was hard to keep their emotions in check when dealing with their investments with 42% saying they lost sleep thinking about bad decisions and 30% admitting to crying.


Medicare has four parts: A) Hospital; B) Doctors and Testing; C) Medicare Advantage; and D) Drugs. Part A is free, and so are many Medicare Advantage plans; Parts B and D have premium payments that vary depending on one’s income. Usually, most people will also buy a supplement if using parts A, B, and/or D to pick up the costs not covered by Medicare. A few weeks ago, three Democratic members of the House introduced the Choose Medicare Act, which would give every individual and business the choice to use Medicare, Exchange policies, or private insurance. According to the sponsors, this coverage would be provided through premium payments, not by taxes. However, it is a long way from having the legislation introduced and being passed, let alone implemented. We will keep you up to date on future developments.

TAXES IN 2020 

2020 was the year of the pandemic starting and many people were out of work and/or received subsidies (stimulus, unemployment benefits, and child tax credits) from the government that were essentially tax-free. According to a report from the Urban-Brookings Tax Policy Center, 61% of US households (106.8 million) paid no federal income taxes last year. This was up dramatically from 75.9 million in 2019. The average for the five years before the pandemic was 43.3%. The projection for this year is for 57.1% (101.7 million) of households will not pay taxes.


The $1.2 infrastructure bill, which passed the Senate on a bipartisan basis, is facing a tough road in the House. The liberal side of the Democratic Party wants the human infrastructure bill to pass first, and many Republicans are opposed to both bills. That said, Congress has more pressing items to address first. By the end of September, it must pass a government spending bill. If this doesn’t happen, it would cause the government to shut down which at this point in the economic recovery would be a disaster. But an even bigger disaster would occur if Congress did not raise the borrowing limit. If Congress fails to do so, it will cause the U.S. to default on its debt. Such an event would not only be embarrassing for the U.S., but it would also cause a major disruption to both the bond and stock markets. Let’s keep our fingers crossed that neither political party tries to play games with these important items. Only then will the battle over infrastructure heat back up.


They say that timing in life is everything and while it is generally said after a positive result, the truth is that isn’t always the case. Stuff happens when it is least expected. All we have to think about is December 2019 when most of us had no concept of coronavirus. As a result of the virus, there are two million people who were forced into retirement, according to The New School’s Schwartz Center for Economic Policy Analysis. The analysis determined there are 49.3 million who were retired as of July 31, 2021, compared to the pre-pandemic estimate being about 47.24 million. Some may go back into the workforce because they will have to and some will do so because they want to, but the majority will likely stay retired. This is a significant loss of intellectual capital for many companies and there is no doubt that the pandemic made most of us reassess our priorities.


This month ProVise celebrated its 35th anniversary. Our journey started in a single office on Missouri Avenue here in Clearwater with just our founder, Ray Ferrara, as the sole employee and no clients. Today, we have offices in Tampa and Clearwater with 32 employees and about 1,200 clients for whom we are managing about $1.6 billion. There is no way to properly recognize and thank everyone who helped make ProVise the company it is today. That said, we would be remiss not to mention the late Bruce Fyfe, CFP® who merged his firm, Personal Resource Management, Inc., with ProVise in 2000. Our thanks to each of you for the confidence you have placed in us to assist with your financial planning and investment management needs.