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The Markets
It's a myth!
According to WebMD, the amino acid L-Tryptophan is not responsible for Americans' post-Thanksgiving food coma. The real culprit is overeating. So, last week's post-feast sleepiness can be blamed on big appetites.
Investors also indulged their appetite for risk last week. Barron's reported:
"...the stock market sent all four major U.S. benchmarks - the Standard & Poor's 500, the Dow industrials, the NASDAQ Composite, and the Russell 2000 - to record highs last week, on the same day. Lest you think that's an easy feat, we haven't seen such a gathering at the summit since December 31, 1999, back when we had juvenile waistlines and Napster accounts. Then, for emphasis and encore, the market did it again a day later, a back-to-back fete the likes of which we haven't seen since the positively Pleistocene era...of 1998. The buying binge continued on Friday, after Thanksgiving's regrettable interruption, propelling the indexes to - you guessed it - more record highs."
U.S. stock markets are doing well and so are some overseas markets. Barron's reported Canada's national index is up 14.3 percent for the year, Thailand's is up 14.4 percent, Indonesia's is up 12.6 percent, and the United Kingdom's is up 8.5 percent.
It's quite gratifying to watch the value of stocks rise. However, U.S. shareholders may want to ask, "Is this congregation of indexes at record highs a sign that our seven-year-old bull market is finding a second wind - or is it a signal that the party has peaked?"
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Data as of 11/25/16
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1-Week
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Y-T-D
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1-Year
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3-Year
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5-Year
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10-Year
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Standard & Poor's 500 (Domestic Stocks)
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1.4%
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8.3%
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6.0%
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7.1%
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13.8%
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4.8%
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Dow Jones Global ex-U.S.
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1.1
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-0.5
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-3.0
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-3.8
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3.7
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-1.0
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10-year Treasury Note (Yield Only)
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2.4
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NA
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2.2
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2.7
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2.0
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4.5
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Gold (per ounce)
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-1.9
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11.8
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11.2
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-1.5
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-7.0
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6.4
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Bloomberg Commodity Index
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2.4
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8.2
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3.4
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-11.8
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-9.7
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-6.8
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DJ Equity All REIT Total Return Index
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1.7
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4.4
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5.9
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11.3
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13.6
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4.7
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S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
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Looking For A Great Gift?
If you have friends or relations with young children, consider starting or contributing to a 529 College Savings Plan. It's a great way to fund a future education and, let's face it, really young children often enjoy the box and wrapping more than the gift.
So, if you want to give a child something they'll always remember, starting a college fund may fit the bill. It's a gift that may also benefit the parents. The College Board reported the average cost of tuition, fees, room, and board for in-state students attending a public four-year university is expected to be about $20,000 for the 2016-17 school year. At that rate, the average cost for four years of college would be about $80,000. Since two-thirds of students received financial aid during the 2014-15 school year, the following example estimates out-of-pocket college costs at $60,000.
Consider the cost of each option for this fictional family:
- Borrowing to pay for college: The Smiths borrow $60,000 to pay for 18-year-old Joe Smith's college tuition. The interest owed is 5 percent per year. Over the next 10 years, they repay the principal, plus about $16,400 in interest. By the time Joe is 28, and the loan is repaid, his undergraduate degree will have cost about $76,400.
- Saving to pay for college: Alternatively, the Smiths could open a 529 Plan account for Joe Smith when he was born. If his family contributed $2,100 a year to the account and earned 5 percent each year, at age 18, Joe would have about $62,000 for college. His family would have contributed about $37,800 and earnings in the account would have contributed about $24,200.
The difference in the amount this fictional family would spend on college is about $38,600.
529 plans offer other advantages, too. Any earnings plan accounts grow federally tax-free, and distributions are tax-free as long as the money is used for qualified college expenses. Many states offer tax deductions or tax credits for 529 plan contributions, as well.
Any adult can open a 529 plan and fund it on behalf of a child. Once the account has been established, parents, grandparents, relatives, and friends can contribute. If you would like to learn more, contact your financial professional.
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How Much Wealth Is There In The World?
In 2016, the Earth's inhabitants were worth about $256 trillion, according to the Global Wealth Report by Credit Suisse Research Institute. Population has grown along with wealth.
1. North America, which has more than 5 percent of the world's population, is the wealthiest region with about $92 trillion of the world's wealth.
2. Europe, which accounts for about 12 percent of the world's population, is next with about $73 trillion. 3. The Asia-Pacific region, excluding China and India, encompasses almost 25 percent of the world's population, and is worth a bit more than $53 trillion. 4. China has more than 20 percent of the world's population and comes in just above $23 trillion. 5. Latin America has less than 10 percent of the world's people and accounts for about $7.5 trillion of the world's wealth. 6. India, with more than 15 percent of earth's inhabitants, has almost $3.1 trillion. 7. Africa has more than 10 percent of the world's population and about $2.5 trillion of its wealth.
The Economist
reported:
"If you had only $2,220 to your name (adding together your bank deposits, financial investments, and property holdings, and subtracting your debts) you might not think yourself terribly fortunate. But you would be wealthier than half the world's population... If you had $71,560 or more, you would be in the top tenth. If you were lucky enough to own over $744,400 you could count yourself a member of the global 1% that voters everywhere are rebelling against."
Of course, where a person lives factors into how wealthy they feel. For instance, last week, Expatison.com reported living in New York was 15 percent more expensive than living in London, and London was 30 percent more expensive than living in Toronto. Living in Toronto was 115 percent more expensive than living in Belgrade. Belgrade was 60 percent less expensive than Singapore, and Singapore was 139 percent more expensive than Mumbai. |
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Weekly Focus - Think About It
"You don't learn to walk by following rules. You learn by doing, and by falling over.
--Richard Branson, British businessman and entrepreneur
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| Best regards, Lofy Group Wealth Management P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
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| Securities offered through LPL Financial, Member FINRA/SIPC Accounting and Legal Services are not affiliated with LPL Financial * This newsletter was prepared by Peak Advisor Alliance. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Sources:
http://www.marketwatch.com/story/us-economy-gains-120000-jobs-in-march-2012-04-06
http://www.bloomberg.com/news/2012-04-05/gap-target-same-store-sales-gain-on-warm-march-weather.html http://www.cnn.com/2012/03/19/opinion/happiness-success-achor/index.html?iref=allsearch
http://www.guardian.co.uk/sustainable-business/bhutan-advise-united-nations-happiness
http://www.goodreads.com/quotes/tag/happiness |
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