Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: January 18th, 2021 | 0 Comments

INVEST FOR THREE YEARS – Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 93 separate 3-years beginning 1926-28, then 1927-29, . . . 2018-20) have produced a positive return. 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).

YEAR ONE IN THE WHITE HOUSE – This year (2021) is the 1st year of Joe Biden’s 1st 4-year presidential term. The S&P 500 has been positive on a total return basis during just 13 of the last 23 “presidential 1st-years,” i.e., 1st-years dating back to 1929, but has been up 8 of the last 9 “1st years.” The average performance for the S&P 500 during the last 23 “presidential 1st-years” has been a gain of +7.7% (total return) (source: BTN Research).

THE INDEX TO FOLLOW – The S&P 500 stock index, worth $33.4 trillion as of 12/31/20, represents 81% of the $41.2 trillion market capitalization of all US stocks (source: S&P).

REALLY LOW – Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. For the decade of the 2010s (1/01/2010 through 12/31/2019), inflation was up just +1.8% per year, the lowest decade of inflation in the USA since the 1930s. By comparison, the decade of the 1970s (1/01/1970 through 12/31/1979) suffered +7.4% annual inflation (source: Department of Labor).

THEY OWN IT NOW – Banks foreclosed on 50,238 homes nationwide in 2020, down 65% from 143,955 foreclosures in 2019 and down 78% from 230,305 foreclosures in 2018. The worst single year of foreclosures in US history – 1,050,500 foreclosures in calendar year 2010 (source: ATTOM Data Solutions).

TOP TEN AND EVERYONE ELSE – The top 10% of US taxpayers in tax year 2018 made at least $152,000 in adjusted gross income (AGI), received 48% of all AGI nationwide and paid 71% of all federal income tax (FIT) collected for the 2018 tax year. The bottom 90% of US taxpayers in tax year 2018 made less than $152,000 in AGI, received 52% of all AGI nationwide and paid 29% of all FIT collected for the 2018 tax year (source: IRS).

WHAT TYPES OF TAXES? – 35% of the total tax revenue taken in by state and local governments are property taxes, a total that is more than the combined tax revenue collected in the form of state income taxes (20%) and corporate income taxes (3%) (source: Tax Foundation).

SOMETHING FOR SENIORS – President-elect Biden outlined on the 2020 campaign trail a proposal that would provide an additional boost in Social Security benefits for those seniors that have been receiving retirement benefits for at least 20 years (source: CNBC).

LOAN OR A GRANT – The 3rd iteration of the “Paycheck Protection Program” (PPP) began last Monday 1/11/21. The first 2 PPP programs loaned out $522 billion while PPP # 3 will lend out as much as $284 billion to first-time business borrowers and to some small businesses as repeat-borrowers (source: Paycheck Protection Program).

PRINT AND PURCHASE – The Fed’s balance sheet reached $6.8 trillion as of 1/13/21, up from $3.9 trillion as of 3/11/20, the result of additional purchases of Treasuries (up +$2.2 trillion in 10 months) and mortgage-backed securities (up +$668 billion in 10 months) (source: Federal Reserve).

FOUR YEARS, EIGHT TRILLION – On 1/20/17, the day Donald Trump was inaugurated as POTUS 45, the national debt was $19.9 trillion. As of 1/14/21, the national debt was $27.7 trillion (source: Treasury Department).

DEATHS – The USA had 2,855,000 deaths nationwide in calendar year 2019, i.e., pre-pandemic, an average of 238,000 per month. From 2/06/20 to 1/06/21, i.e., the 11 months beginning with the first COVID-19 death in the USA, 358,000 Americans died as a result of the pandemic, an average of 32,500 per month (source: CDC).

ESTATE TAXES – The maximum amount that a deceased individual may pass onto his/her heirs federally estate-tax free (with proper planning) rises to $11.7 million in 2021, up from $11.58 million in 2020. The limit was $675,000 in 2001 or 20 years ago. Please consult a tax expert for details (source: Internal Revenue Service).

DIFFERENCE OF OPINION – Rock superstar Prince died on 4/21/16, leaving an estate that was valued (for estate tax purposes) at $82 million. The IRS has challenged the valuation techniques utilized by his administrator, upping the estate value at Prince’s death to $163 million. The IRS is asking for an additional $39 million in estate taxes and penalties above what Prince’s estate has already paid (source: IRS).

THEY’RE NOT ALABAMA – Only 3 FBS schools (Football Bowl Subdivision) out of 130 opted out of the entire 2020 college football season – Connecticut, New Mexico State and Old Dominion (source: NCAA).