We are particularly pleased to share this Newsletter. The COVID-19 pandemic has challenged us all. We hope that you will find the Newsletter modestly uplifting as we offer perspectives different from those in our previous Newsletters.

We begin with an article on looking ahead for the stock market, much of which is a report of a study done by Dimensional Fund Advisors, the mutual fund company we are using increasingly. I’ll tell you the conclusion I come away with from reading that article: I need to relax because the market will do what it will do, but in the long run it will go up significantly. And with a diversified portfolio, the terrible times in the stock market will not be so terrible. A corollary is that we don’t know what will happen in the immediate future.

We continue with a piece on charitable contributions in a time when others will be helped by your generosity. There are also a number of needs that can be met with little or no money. However, we focus here on gifts of money, while also appreciating the important volunteer work that so many of you are actually engaged in.

The next article is on the move Mary and I made to a retirement community. And we conclude with a report on how the people who work at O&A are managing in their alternative offices, and Office Matters. Happy reading – and may good health, perseverance, and kind consideration of our fellow humans be our watch words.

David W. Otto, Editor



With President-Elect Joseph R. Biden and his team looking forward to the January 20 inauguration, what can we expect from the stock market?

The Dimensional Fund Advisors team has provided considerable research on the difference in stock market returns depending on which party is in the White House. What follows is taken from an article that addresses a specific question: How might a Biden/Harris administration impact the stock market?

  • With a new administration comes new policies, which may cause investors to make changes to their portfolio based on their perceived implications.
  • Perhaps one of the biggest questions on investors' minds is the impact of Biden's proposed tax plan - some of the key features of which include:
  • A new 12.4% social security tax on incomes above $400,000 (split between employers and employees)
  • A corporate income tax increase from 21% to 28%
  • Repeal of the Trump tax cuts (currently set to expire in 2025)
  • Long-term capital gains rate increase from 23.8% to 39.6% on incomes above $1,000,000
  • Elimination of the stepped-up basis rule [which will mean that when a tax payer dies, beneficiaries will likely pay increased taxes on assets that have appreciated.]
  • To pass a tax increase, both the House of Representatives and the Senate need to pass a bill –a divided Congress could constrain this. If changes do happen, they aren’t immediate, and it is impossible to predict their end-effect. For example, in 2013, the Bush tax cuts expired for those making more than $400,000. In effect, this was a tax increase on income above that range. The S&P 500 increased in 2013, 2014, 2015, and 2016; highlighting that the tax increases did not cause a market collapse, a worry that many investors have during times when we experience tax hikes. Investors should be careful to extrapolate the impact of tax policy on their portfolios.
  • Often when a new administration comes into office there are plenty of opinions and prognostications around which sectors will perform best, leading some to make tactical changes. President Trump’s most recent 4-year term serves as an example of the difficulties of making sector forecasts based on who is in the Oval Office. Energy and financial stocks were viewed as the best bets under a deregulatory Trump administration, yet they’ve been the worst sectors since 2016.
  • Lastly, investors should remember that while US presidents may have an impact on market returns, so do hundreds, if not thousands, of other factors—the actions of foreign leaders, a global pandemic, interest rate changes, rising and falling oil prices, and technological advances, just to name a few. The combined impact of millions of investors placing billions of dollars’ worth of trades each day based on the perceived impact of these factors results in market prices that incorporate the collective expectations of those investors. This makes consistently outguessing market prices very difficult.
  • While it may feel natural to draw a connection between the administration in power and the impact they may have on markets, shareholders are investing in companies, not a political party. Companies focus on serving their customers, helping their businesses grow, and generating profits, regardless of who is in the White House. The chart below shows the annualized returns during different presidential terms going back to 1932. [Red shows a Republican President; blue represents a Democratic President.] The exhibit illustrates that there is no evidence to suggest that having a Republican or Democrat in office is better or worse for markets.
  • Making investment decisions based on the outcome of elections, or how investors think policy changes may unfold, is unlikely to result in reliable excess returns. On the contrary, it may lead to costly mistakes. Accordingly, there is a strong case for investors to rely on a consistent approach to asset allocation—making a long-term plan and sticking to it.



In this unsettled time of the COVID-19 pandemic, so much of life feels beyond our control. But consider that there can be inspiration and purpose in philanthropy.

Since the onset of the pandemic, Americans have engaged in dramatically increased charitable giving. The Chronicle of Philanthropy journal stated that 40% of regular donors to a variety of causes expect to give more to charity in 2020 than in previous years.

The events of 2020 are asking all of us to be more generous than we have ever been. With so much disruption in the lives of so many, the needs are broader and deeper than ever. As you make decisions about your end-of-year charitable giving, we at O&A are offering a context for you to consider extraordinary charitable donations.

How far can you expand your donations in the face of unprecedented need?
You might begin by looking at how significantly you have reduced your expenditures in the past nine months. Compared to last year, many people are spending dramatically less on travel, restaurants, clothing, and many other things. That leaves extra money to be put to good use.

What are you prioritizing?
You are probably being flooded with requests for support from nonprofits in challenging circumstances. Are your concerns primarily for people facing food insecurity? Homelessness? Or would you choose to support Education? Domestic abuse? Are your interests in helping to keep the arts alive – or something else entirely? Might you have a bonus you would share?

Then, consider the connections you could make to local, national, or world-wide organizations that would not only benefit from your donations, but also broaden your horizons. Do you read the stories in the New York Times Neediest, for example? So many human-interest stories tug at our hearts and invite our compassion.

With our recent move to Wake Robin, we looked for organizations in our new part of Vermont that might benefit from our help and be consistent with our priorities for giving.

Burlington has a history of welcoming immigrants to the area. In the last thirty years Burlington (population 43,000) has added 5,000 immigrants. Many of them have challenges like learning English and making a living wage. The Boys and Girls Club of Burlington has a significant focus on programs for kids from families with those needs. They have a terrific guideline for the kids: “We’ll commit to your success, if you commit to your success.”

For understandable reasons, the pandemic has made life for Burlington’s immigrants more challenging, and the Boys and Girls Club has increased staffing to offer more alternatives to this segment of the population. Our personal contribution to that organization has led to a connection to the Boys and Girls Club we will hang on to in the future.

You may have something similar where you live: an established organization that has the expertise to ramp up their efforts to meet the needs of the pandemic. Your donations can help them and spark joy for you as well, via the new commitment.

How will you make your philanthropy decisions for 2020 year-end?
As you consider your options and do research, there are decisions to make: will you stay local or cast a wider net? Where will you focus? Might you find it helpful to write out a plan so you can more easily evaluate it? Then, it is important to set a date for writing checks.

Here is another creative idea. This Christmas our family has decided to have a name-draw within the family. Each person will receive one gift. In addition, each person is also asked to donate to a charity, chosen specifically to honor the selected family member, for which that person might be particularly appreciative. Ideally, we are not only raising a bit more money for good causes, but we are educating the next generation or two to think generously about the needs of others.

One more consideration: your philanthropy may not cost you as much as you think. For those who itemize on their income tax return, additional charitable donations can be taken as a tax deduction. If you are interested, there may be other ways that O&A can be of assistance, e.g. giving charitable donations from an IRA for those who are over 70½.

As we have our ongoing discussions with you, our clients, we look forward to hearing the inspirational ways you have used philanthropy to make this a better world.



David and Mary have moved to Shelburne, VT, in the western part of the state, just south of Burlington. They decided to take the advice David has been giving to clients for years: as you age, consider where to live. First of all, find a place that nurtures your interests, provides cultural opportunities, and makes your preferred physical activity easy. Is it near children, siblings, and/or friends? Does it have options for help when and if you might not be able to adequately care for yourself? Making those plans early enough is important. A crisis, even a mini-crisis, is not a good time to do long-term planning. (See O&A Newsletter from March 2018 on the website, for the original, extensive article on this subject.)

David tells the story: We looked at various retirement communities over the course of several years, mostly Continuous Care Retirement Communities (CCRCs), and decided that 2021 was the year to move. Then a cottage that seemed just about ideal came available at one of our top two choices, and we decided to make the move a few months sooner. We left Norwich, VT, and moved to Wake Robin in Shelburne, VT, in early September of 2020.

So how has it gone? Moving in the middle of COVID has had its challenges. But the planning, deaccessioning, and packing, though time-consuming, went well. We had the good fortune of getting fabulous help from our children and a granddaughter who had not yet started her fall college semester. But for those who don’t have these resources readily available, there are services that assist with such a move, referred to generically as “Senior Home Consultants.” One of our client couples used such a service in a recent move, and both of them were very impressed. Such services help you downsize, find outlets for excess baggage, pack everything to be moved, and unpack and settle the house upon arrival. While these clients did not use all the services offered, they reported that they took pictures of their new CCRC and showed the consultants where they wanted their current belongings to end up. They left their former residence, spent one or two nights in a B&B, and walked into their new place with most everything where it belonged.

We now live in a semi-detached cottage that, while considerably smaller than our Norwich home, has proven to be just the right size. While I admit to missing my basement garage and shed where I kept tools, etc., and Mary really loved the kitchen that she created in our last home, we have both adjusted rather quickly to a modified way of living. We currently have sufficient space to live very comfortably. To say we long for our former house would be inaccurate.

There is another aspect of moving to Wake Robin that has made this move appealing: in many ways we have a brand-new cottage. The previous residents lived here more than 10 years and, as may be typical of CCRCs, all homes get a complete makeover at that point. That generally means an all new kitchen, new appliances, new bathroom fixtures and cabinets, etc. Having southern and western light is a real plus. The fall sunsets over the Adirondack Mountains have been spectacular. The cottage reflects our wishes and tastes in many ways.

Meeting new people here at Wake Robin is considerably restricted because of the pandemic. But we are beginning to know a surprising number of fellow residents and not infrequently we meet a new acquaintance on morning walks (there are six miles of trails at Wake Robin.) Jasper, our West Highland White Terrier, is a real asset in that regard. Also, we have spent some very nice time with the neighbors in the three closest cottages. In short, if we had it to do over again, we would do the same thing.

I have converted one of the bedrooms into an office. We have the same office phone system, so telephone numbers remain the same. I go to the new Norwich office occasionally (it’s a drive of an hour and 45 minutes) and when the pandemic is under control and we are again seeing clients face-to-face, I expect to go there on a more predictable basis. Incidentally, the new office at 289 Main Street in Norwich is three doors up the street from our previous office.

In short, we expect this new adventure to go well and are happy to talk with people about our experience.



When the pandemic hit in March, the experience of the O&A staff members was likely quite similar to yours. Our work and personal life went from normal to absurdly not normal in a very short time. Susan returned from a ski vacation in Wyoming at the end of February and was surprised to see a few travelers in the Chicago airport wearing masks. Kathy was preparing for a long-awaited vacation to Iceland with her son in mid-March and we were all fairly certain that she would get on the plane. Then everything changed; we closed our offices and everyone worked from home. What follows are snapshots of our pandemic experiences.

From Deborah:
I was the first to go remote because my city of New Rochelle was one of the first epicenters of COVID-19 in the US, and my husband’s County Legislator position meant he was out with the public a lot. Sadly, things shut down everywhere soon after and the rest of the world has more than caught up to us. My first “home office” was in our dining room, where I had plenty of space to spread out and display my first professional name plate – Ms. Levy – at the edge of the table. I’ve since moved the home office, because I needed a quiet room when my husband started working remotely, but I still come back to the dining room when I’m alone for better heat and a more attractive Zoom background. I appreciate how technology has made working from home so easy and efficient, although I miss the office camaraderie and meeting with clients in person. But I don’t miss commuting, and am happily using the extra time for longer walks and political and community work.

From Kathy:
Since March the Patton house has transformed into a “WeWork” office for my husband, Chuck, two of our adult children back from New York City, and me. Our once simple daily routine now includes a morning race to the coffee maker, a continuing battle for Internet bandwidth and the comfort in the evening of a quarantine meal – lots of meals. Things we purchased during quarantine include: An internet extender, 1 desk, 2 ergonomic chairs, 3 monitors, 2 keyboards, 4 extra-large reusable water bottles, several ink cartridges, 2 sets of headphones, a new cast iron skillet, a ton of food and of course, plenty of coffee. Going through the pandemic with each other helped us cope with the evening news report and Chuck and I were happy to have the nest partially filled once again. Now, about those extra pounds we put on…

From Joan:
In November of 2019, we lost Princess, our almost 16-year-old Shih Tzu. We had little thought of getting another dog, but when Steve and I both started working from home and realized how empty the house was, that seemed the perfect time to get a puppy. So we welcomed 5-month-old Jack into our home. He is also a Shih Tzu and brings us so much joy. But it also started me thinking about how many others have adopted pets to fill an emptiness they may not have known they had. And with that, I realized that people need more love, kindness and help than they are willing to ask for. So when this pandemic is over, I will be volunteering a lot more to help the most vulnerable in our community.

From Susan:
I have never been a basketball fan, so March Madness has never meant much to me. In 2020, though, I had my own version of March Madness to look back on. When it was clear that COVID was serious and was easily spread when people were together, I stopped travelling to the Norwich office. This meant that I stopped my daily walks with my parents and my in-person work relationship with my father. My dog, Poppy, lost her daily romp sessions with Jasper – my parents’ Westie. Both dogs are sad about that. On March 15th, my husband and I made a very quick trip to Ohio, armed with disposable masks, a box of latex gloves, and two bottles of hand sanitizer that we happened to have in our cabinet, to retrieve our daughter and all of her belongings from college. She then settled in to college life from home and joined my teacher-husband and me in a struggle for the limited bandwidth in rural Vermont. Since that time, I have continued to work at home, going to our beautiful new Norwich office once a week. We are not seeing clients there at the moment, but perhaps by next March, the madness will have subsided and my father and I will be able to see clients in-person once again. I look forward to that time tremendously.

From David:
I have managed to set up a pretty functional office in our new home. However, the pandemic has limited my ability to get and install such things as the needed furniture. And the phones and computer system took much longer to be efficiently functional. I am used to a system that takes little of my attention and for the last three months it seems like everything has taken more time. Recently however, things seem to run more smoothly.

During this year, the staff has stayed very closely connected. We talk daily, Zoom together with clients, and occasionally have social gatherings. We even managed to pull off a wonderful Holiday party to replace our in-person restaurant gathering with a substitute for the usual Yankee Swap. This year we all got together with spouses on Zoom. The first half of our evening was facilitated by Lauren Clark of LC DESIGNS NYC, who directed us in putting together our elaborate charcuterie board. LC DESIGNS NYC sent out the ingredients to each couple, which included cheeses, Parma ham, salami, fruit, nuts, dried fruit, and even edible flowers. Lauren then conducted an in-person Zoom class on how to artfully prepare and present it all. It was delightful. We then ate what we had prepared. That was followed by the highlight of the evening, opening our “Secret Santa” gifts that were thoughtfully purchased and sent to each recipient. While we all missed being together in person, this was a wonderful second choice.

The O&A team is strong and continues to be dedicated to meeting the needs of our clients. We miss the in-person time with you, but always enjoy phone calls, emails, Zoom, and look forward to welcoming you back into our offices.



In this section we often report on conferences various members of the staff have attended. In the March Newsletter we wrote that we had not been able to go to a Dimensional Conference because of the pandemic but hoped to do that prior to summer vacations. Little did we know that not only would there be no in-person conference for a year or more, but that summer vacations would also be radically disrupted. Most of us have been to one or more virtual conferences, which have the advantage of taking less time, by having no travel. But Zoom conferences also lack a lot that in-person conferences offer. Perhaps later in 2021 that will change.

Also announced in the March Newsletter were historically low mortgage rates. Surprisingly, those rates are now even a bit lower than they were in March. Let us know if we can be of help.

This year taxpayers who do not itemize can still deduct up to $300 of charitable contributions made during 2020.

Finally, while David continues to be the primary writer and nominal editor of the Newsletter, everyone in the office contributes significantly. The reader is the beneficiary.

All of us at Otto & Associates send good wishes to you and your family for the holidays and the year ahead.