Did You Know…?

Form 1099-MISC Filing Requirements
As a general rule, you must issue a Form 1099-MISC to each individual, partnership, Limited Liability Company (“LLC”), Limited Partnership (“LP”), or Estate you have paid at least $600 during the calendar year in services, rents, or legal fees. Note that personal payments are not reportable. 

Form 1099-MISC is also required if you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.   

Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. The most common exceptions are payments to a corporation (including an LLC that is treated as a C or S corporation), payments of rent to real estate agents or property managers, and payments made with a credit card or payment card and certain other types of payments, including third-party network transactions. 

Form 1099-MISC are due by January 31, 2020. You can submit Form 1099-MISC to the IRS by mail or online, using the Filing Information Returns Electronically (FIRE) system. Please note that if you issue more than 250 information returns, you are required to file electronically and may be penalized if you fail to do so.  The IRS operates a centralized call site to answer questions about reporting on Form 1099 and other information returns. If you have questions related to reporting on information returns, the IRS centralized call site can be reached at (866) 455-7438. 

“Your Financial Choices”

The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®, AEP®.

This week, Laurie and her guest, Nicholas Nanovic, Esq., LL.M., AEP® from Gross McGinley, LLP, will discuss: “Trusts – general estate planning, minor trusts, A/B trusts and more.”

Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.

Quarterly Commentary – Q4 2019

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Equity markets closed out 2019 with another strong quarter which helped push the S&P 500 to its highest annual return since 2013. Markets continued to achieve new highs throughout most of the year as central bank rate cuts and robust consumer confidence countered the negative effects of trade uncertainty and declining global manufacturing. We often stress to investors that long-term market performance tends to track corporate earnings growth, but over shorter periods of time, it is common to see stock prices and earnings diverge. In our view, this was a key theme of 2019 as stock prices surged higher despite lackluster earnings growth. We can think of stock investing as simply purchasing the right to a share of the future earnings of a company. Thus, stocks have begun to look more “expensive” since investors must now pay a higher price for the same amount of future profits. An acceleration in corporate earnings growth will likely be needed in 2020 in order to sustain and support recent levels of stock market returns. As we move into 2020, consensus analyst estimates are calling for earnings growth just shy of 10%, which would represent a relatively meaningful acceleration from the flat growth we observed in 2019, but a tempering of return expectations going into the new year may be warranted.

The response by central banks around the world to softening economic activity throughout 2019 was also a boon for bond investors. Much of those gains were achieved during the first three quarters however, as optimism surrounding economic growth began to resurface during Q4 leading to a bounce in Treasury rates. Rates across the yield curve are influenced by expectations for economic growth and inflation, and with the unemployment rate at its lowest level since the 1960’s and evidence of wage growth at last emerging, an argument could be made that an uptick in inflation may not be far behind. Depending upon how significant it is, the emergence of inflation would potentially signal the next step in the maturation of the bull market and could push interest rates higher in the coming year.

The healthy returns achieved across most major asset classes made 2019 one of the best years of the current market cycle. Remarkably, it was largely the exact opposite of what occurred during 2018 when most major asset classes exhibited losses. Over the past two calendar years, the benefits of diversification have been harder to see as many assets that historically behaved differently from one another moved in lockstep. This is largely a result of bond yields sitting so close to their lower bounds, and as such, there are potential implications for the expected risk and return profiles of traditional balanced portfolios. If the correlation between stocks and bonds moving forward is higher than it has been in the past, then the diversification benefits of owning bonds will be diminished. This may create challenges for investors, but the good news is that the economy remains healthy and even began to show evidence of firming up during the fourth quarter. If this trend continues, then the probability of recession will decrease in the near-term and the primary risks to the market will remain geopolitical in nature. And as we have stressed in prior commentaries, market declines related to geopolitical events tend to be far shorter and shallower than those that have a more material impact on economic growth.

VIDEO: Q4 2019 Market Commentary
Connor Darrell CFA, Head of Investments, shares Valley National Financial Advisors’ summary of the fourth quarter as we enter 2020. WATCH NOW


We’re kicking off our tax preparation season. That means it is time to confirm tax preparation arrangements. Later this week, our tax team will be sending out customized communications to our clients with instructions and forms. You can also find these items and additional resources at our website: valleynationalgroup.com/tax

The Markets This Week

by Connor Darrell CFA, Assistant Vice President – Head of Investments
Typically, our quarterly commentary replaces “The Markets This Week” in our TWC newsletter, but 2020 kicked off with some troubling developments in the Middle East which we anticipate will dominate the news cycle early in the year. As such, we wanted to take the opportunity to provide a summary of our current thinking on the geopolitical environment as it pertains to U.S.-based investors.

On January 2, the United States announced that it had killed Iranian General Qassem Soleimani in an airstrike outside of Baghdad. Soleimani was a key military leader and a revered figure among the Iranian public. The attack represents a significant escalation in tensions between the U.S. and Iran, which have been festering since the Trump Administration’s decision to withdraw from the Iranian nuclear deal and re-impose economic sanctions. Security experts anticipate that the Iranian government will retaliate, and the uncertainty surrounding what that retaliation might entail has caused some minor volatility in equity markets. We have raised our assessment of “international risks” to a 7 out of 10 in our Economic Heat Map to reflect the elevated tensions between the U.S. and Iran. The rest of our Heat Map remains unchanged and we see no metrics flashing warning signs.  Important to our outlook is that we do not feel the increased geopolitical risks pose any threat to the key economic pillars we track, and we do not recommend making any changes to portfolio strategy as a result of this news. 

While we do believe that the attack represents a significant escalation and a meaningful change in tone of the Trump Administration’s dealings with Iran, we do not believe that tensions are at a point where they threaten the long-term stability of markets. We will likely see increased volatility due to headline risks, as well as disruptions in the oil market. However, the supply and demand dynamics at play in the oil market are vastly different than they were even ten or fifteen years ago, and the power of U.S. production is at an all-time high. Even in the face of significant geopolitical instability, we believe there is likely a cap on how high oil prices can push, though we do not know exactly where that cap might be. Investors maintaining a diversified global portfolio are well positioned to deal with short-term volatility in markets, and the evidence of improving economic fundamentals that emerged during the latter half of 2019 bode well for the economic expansion to continue in the near-term. We will continue to monitor the situation closely with particular interest in what Iran’s response might be, but we remain confident that long-term economic fundamentals will be largely unimpacted at this time.

Heads Up!
We are in the process of updating and improving the format through which we report our U.S. Economic Heat Map. We hope that these improvements make the report more informative and useful. Be on the lookout for these updates in the coming weeks!

The Numbers & “Heat Map”

Sources: Index Returns: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends. Interest Rates: Federal Reserve, Freddie Mac

The health of the U.S. economy is a key driver of long-term returns in the stock market. Below, we grade 5 key economic conditions that we believe are of particular importance to investors.



Our consumer spending grade remains an A despite recent softening in retail sales numbers. US consumer confidence remains high, and we anticipate a strong holiday shopping season. The consumer has been the bedrock of the US economy through much of the current expansion.



With the Federal Reserve expected to refrain from any further adjustments to interest rates without a material change in the economic outlook, we have downgraded our Fed Policies grade to a B+. The low level of interest rates remains a positive for markets, but sentiment will likely no longer be aided by anticipated rate cuts.



As was largely expected by markets, corporate earnings growth was weak during Q3 as a result of the global slowdown and trade policy uncertainty. However, according to Factset, 75% of S&P 500 companies reported a positive earnings surprise, meaning things were not quite as weak as many had feared.



December’s headline jobs growth number of 312,000 handily beat consensus estimates yet again and provided further evidence that the US consumer remains in a strong position to continue fueling the expansion.



Inflation is often a sign of “tightening” in the economy and can be a signal that growth is peaking. Recent inflationary data has increased slightly, but inflation remains benign at this time, which bodes well for the extension of the economic cycle.




We have raised our International Risks metric to a 7 following the US airstrike which killed Iranian General Qassem Soleimani. We expect heightened volatility in markets as a result of the further escalation of tensions that this action represents. However, we stress that volatility stemming from geopolitical events tends to be short-term.

The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.

Did You Know…?

by Michael Roper CPA, Assistant Vice President
Help Protect Your Documents from Scammers
Be careful when writing the date 2020 on checks or other legal documents. Someone could potentially alter the date if you abbreviate the year to two digits; ‘20’. For example, the date 1/7/20 written on a check could be changed to 1/7/2021 next year and present it for payment next year. The date 1/7/20 on a debt agreement could be altered to 1/7/2018 with a demand for back payments.

The easiest way to avoid these problems? Write or type the date completely – 1/7/2020.

“Your Financial Choices”

The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®, AEP®.

This week, Laurie with guests Tim Roof, CFP® and Connor Darrell, CFA, will discuss: “2019 Market Review & Investor Tips” – like reviewing your 401k allocation, considering if you qualify for a ROTH and how that may offer another investment option, importance of an emergency reserve, and more.

Laurie will respond to questions submitted at yourfinancialchoices.com/contactlaurie during the next live show. Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.