Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: January 4th, 2021 | 0 Comments

FOR THE YEAR – The S&P 500 gained +18.4% (total return) during 2020, the 13th year in the last 25 years that the $33.4 trillion index has returned at least +15% (total return) for the calendar year. 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).

LONG-TERM – The S&P 500 has gained an average of +10.9% per year (total return) over the last 50 years (i.e., 1971-2020). The index has been positive in 16 of the last 18 years. Over the long-term, the S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).

HIGH-FLYERS – The NASDAQ Composite gained +44.9% (total return) in 2020 and has gained +98.1% (total return) over the last 2 years (2019-2020), its best 2-year run since 1998-1999. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).

BOND INDEX – The taxable bond market was up +7.5% in 2020 (total return) and has gained +7.6% per year (total return) over the last 40 years (1981-2020). The Bloomberg Barclays US Aggregate Bond Index (created in 1986), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement. The index is a major benchmark for US bond investors (source: Bloomberg Barclays).

MOST OF THE TIME – The +7.5% total return for Bloomberg Barclays US Aggregate Bond Index in 2020 follows its +8.7% gain in 2019, the best “back-to-back” years for the index since 2001-2002. The widely followed bond index, created in 1986 with backdated history calculated to 1976, has produced a negative total return for the calendar year in just 3 years of the last 40 years, i.e., in 1994, 1999 and 2013 (source: Bloomberg Barclays).

TIME IN THE MARKET – Since 1950 (i.e., 1950-2020), the S&P 500 index has been up 54% of 17,866 trading days, 60% of 852 months, 67% of 284 quarters and 73% of 71 years (source: BTN Research).

MISSING THE BEST – The total return for the S&P 500 over the last 30 years (1991-2020) was a gain of +10.7% per year (total return). If you missed the 24 best percentage gain days over the last 30 years (i.e., 24 days in total, not 24 days per year), the +10.7% annual gain falls in half to a +5.3% annual gain (source: BTN Research).

AVOID THE WORST – The total return for the S&P 500 over the last 30 years (1991-2020) was a gain of +10.7% per year (total return). If you avoided the 24 worst percentage days over the last 30 years (i.e., 24 days in total, not 24 days per year), the +10.7% annual gain rises to a +17.1% annual gain (source: BTN Research).

JOBLESS – The lowest (3.5%) and the highest (14.7%) unemployment rates in the United States in the last 50 years (since 1970) both occurred in 2020, and they took place just 2 months apart (source: Department of Labor).

BIRTHS, DEATHS AND IMMIGRATION – Between 7/01/19 and 7/01/20, the Census Bureau estimated that the US population grew by just +0.35%, i.e., approximately one-third of 1% growth rate between 2019-2020. That’s the lowest year-over-year growth rate in the USA based upon records maintained since 1900 or 120 years of data (source: Census Bureau).

LIVING LONG – The life expectancy at birth of an American baby in 1971, i.e., 50 years ago, was 71.1 years. The life expectancy at birth of an American baby today is 78.7 years. Thus, life expectancy in the United States has increased 7.6 years over the last half century, i.e., American life expectancy at birth is increasing at the rate of 1 ½ years every decade (source: Center for Disease Control).

TEN-YEAR TREASURY NOTE – The yield on the 10-year Treasury note ended 2020 at 0.91%, its lowest calendar year close ever and down 1 percentage point from its 12/31/19 close of 1.91%. The 10-year Treasury note yield was 0.50% on Monday 3/09/20, its lowest closing yield ever. 10-year notes have been traded in the USA since 1790, i.e., 230 years of trading (source: Treasury Department).

HOUSING – The average interest rate nationwide on a 30-year fixed rate mortgage was 2.76% at the end of 2020. The all-time record low national average is 2.66%, set just 1 week earlier on 12/24/20 (source: Freddie Mac).

OIL PRICES – The price of oil ended 2020 at $48.52 a barrel, down 20.5% from its 2019 close of $61.06 a barrel. Oil’s all-time closing high price is $147.27 a barrel as of 7/11/08 (source: CME Group).

OVERSPENDING – The national debt of the United States was $27.56 trillion as of the close of business on Wednesday 12/30/20, an increase of $4.36 trillion during calendar year 2020 (source: Treasury Department).