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Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: July 27th, 2020 | 0 Comments

1. TIME IN THE STOCK MARKET – If you selected any single month at random to invest in the S&P 500 during the 25-years ending 6/30/20, you achieved a positive total return 66% of the time. If you extend your investment time horizon to just 1 year, you achieved a positive total return 80% of the time. If your time horizon was 5 years, you also achieved a positive total return 80% of the time. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. BEFORE ELECTION DAY – The S&P 500 has lost 1.1% on average (total return) over the 3 months leading up to the last 8 presidential elections, i.e., the 3 months of August-September-October over the 8 election years from 1988 through 2016. The stock index was up in 5 of the 8 election years from August-to-October but has been down in 2 of the last 3 election years over the 3-month period (source: BTN Research).

3. NEVER BEEN HIGHER – The NASDAQ Composite closed at an all-time high of 10,767 on Monday 7/20/20, its 12th record close since a national emergency was declared in the United States on 3/13/20. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).

4. T-NOTE – The yield on the 10-year Treasury note last closed above 2% on 7/31/19, i.e., a year ago. Every day since 7/31/19, the yield on the 10-year Treasury note has been below 2% and it has been below 1% each day since 3/19/20. From 1946 to 9/06/11, the yield on the 10-year Treasury note did not close below 2%. 10-year Treasury notes have been traded in the USA since 1790, i.e., 230 years of trading (source: Treasury Department).

5. CHEAP MONEY – The national average interest rate for a 30-year fixed rate mortgage as of 7/16/20 was 2.98%, an all-time record low, producing a $421 monthly “principal and interest” payment per $100,000 borrowed. The national average rate rose slightly to 3.01% on 7/23/20 (source: Fannie Mae).

6. TAKE ADVANTAGE OF LOW RATES – $1.2 trillion of corporate bonds were issued by “investment grade” companies in the first half of 2020, a record volume in US history for top-rated firms during the January-to-June time period (source: Securities Industry and Financial Markets Association).

7. LOST THEIR HOME – Banks repossessed 527,906 single-family homes in the 1st half of 2010 during the global mortgage crisis that began in late 2008. A decade later, banks repossessed just 37,917 single-family homes during the 1st half of 2020 at the beginning of the COVID-19 pandemic (source: Attom Data Solutions).

8. SELLERS’ MARKET – There were 350,000 fewer existing single-family homes for sale in June 2020 vs. June 2019, i.e., 1.57 million for sale this year vs. 1.92 million for sale last year (source: Nat’l Association of Realtors).

9. JUST IN CASE – The 5 largest banks in the USA announced in mid-July 2020 their plans to set aside $35 billion to prepare for what could be a wave of future defaults – mortgages, credit cards, personal loans, auto loans and corporate bankruptcies. The banks estimate that $24 billion of the $35 billion of potential losses could occur over the next 12 months (source: CNN).

10. HOSPITALS – Between 3/01/20 and 6/30/20, American hospitals lost $51 billion per month of revenue due to cancelled and foregone medical services (source: American Hospital Association).

11. IMMENSE IMPACT – The Mayo Clinic furloughed or cut the hours of 29,500 of its 70,000 employees (42%). Mayo estimates the pandemic will cause $3 billion in canceled surgeries for them in 2020 (source: Mayo Clinic).

12. GOOD USE OF MONEY – Every $1 the IRS spends on “examinations and collections” results in $3 of increased tax revenue (source: Congressional Budget Office).

13. DIFFERENT STATES – In both Florida and Texas, general sales tax revenue makes up at least 60% of their total tax revenue collected, the highest percentages in the nation. General sales tax revenue makes up just 12% of Vermont’s total tax revenue. Neither Florida nor Texas has a state income tax (source: Census Bureau).

14. BUMPY SKIES – The 3/27/20 CARES Act allocated $25 billion to 11 US airlines to be used for the payroll and benefits of the individual airline companies. The legislation prohibits the 11 airlines that received CARES Act money from implementing any layoffs until 10/01/20 (source: CARES Act).

15. THE BEST – Jon Rahm won the PGA’s Memorial Tournament on 7/19/20, moving him to # 1 in the World Golf Rankings. Rahm appeared in “Faces in the Crowd” in Sports Illustrated on 10/06/14 while he was in college. He was the world’s # 1 ranked amateur golfer for a record 60 weeks through 6/22/16 (source: BTN Research).

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