Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: June 7th, 2021 | 0 Comments

ONE YEAR LATER – The companies in the S&P 500 had an average market capitalization of $74.2 billion as of 5/31/21, up from an average market capitalization of $52.7 billion as of 5/31/20. 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: source: BTN Research).

FUNDING A RETIREMENT – The S&P 500 has averaged +9.6% per year (total return) over the 25 years ending 12/31/20. A lump-sum of $877,760 (in a pre-tax account) will sustain a 20-year payout of $100,000 per year (i.e., $2 million of gross distributions before taxes) assuming the funds continue to earn +9.6% annually. This mathematical calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

INVESTING AT A RECORD HIGH – The S&P 500 has set 180 all-time record closing highs in the last 5 years, i.e., since 6/07/16, an average of 3 record closes per month (source: BTN Research).

REALLY LOW – As of 6/04/21, the yield on the 10-year Treasury note has been below 2% for 462 consecutive trading days, i.e., since 8/01/19, the longest stretch below 2% in US history (source: Treasury Department).

ONCE IN – Congress is debating legislation (known as SECURE Act 2.0) that would require any employer with at least 10 employees who sponsors a 401(k) plan to automatically enroll eligible employees at a 3% contribution rate. Employees would retain the right to opt out of the plan (source: SECURE Act 2.0).

IN TEN YEARS – The 10-year budget forecast released by the Biden White House on Friday 5/28/21 predicts that over the next decade (fiscal year 2022 through fiscal year 2031) the government will collect $54.7 trillion in tax revenues (i.e., “receipts”), spend $69.2 trillion (i.e., “outlays”), netting to a $14.5 trillion deficit created over just the next 10 years. That’s on top of our national debt of $28.2 trillion as of 5/31/21 (source: Biden White House).

INFLATION – The 10-year budget forecast released by the Biden White House on Friday 5/28/21 predicts that the “Consumer Price Index” (CPI) will not exceed 2.3% in any year through 2031 (source: Biden White House).

BRAND NEW HOMES – The median sales price of new homes sold in the United States in March 2021 was $372,400, an all-time nominal record, i.e., non-inflation adjusted. The average sales price of new homes sold in March 2021 was $435,400, also an all-time nominal record. The peak in both measurements (median price and average price) on an inflation-adjusted basis was set 4 years ago in May 2017 (source: Census Bureau).

BABIES – When America recorded 4.32 million births in 2007, it broke the nation’s all-time high of 4.31 million births from 1957. Since 2007, the number of US births has fallen in 12 of 13 years to 3.61 million births in 2020, the same number of US births that took place in 1980 (source: Centers for Disease Control and Prevention).

NEED THE CASH – 49% of American women and 45% of American men begin taking their Social Security retirement benefits before they turn age 65 (source: Social Security Administration).

LIVING LONG – US life expectancy at birth was 60.8 years in 1921. US life expectancy at birth was 77.8 years in 2021. Thus, life expectancy has increased by a year every 6 years over the last century (source: CDC).

DOLLAR IS KING – 59% of the world’s foreign exchange reserves, i.e., cash holdings of central banks around the world, were held in US dollars as of the end of calendar year 2020, its lowest level in 25 years but still making the dollar the most popular currency in the world. The Euro, representing 21% of global foreign exchange reserves, is the # 2 most widely held currency (source: International Monetary Fund).

LAND OF LINCOLN – S&P has downgraded the credit rating for state-issued debt from Illinois 5 different times since 2009, most recently in 2017 (source: S&P).

ROCKY MOUNTAIN HIGH – 18 states have passed laws that legalized the use of cannabis for adults who are at least age 21. Colorado was the 1st state, beginning its legal sales on 1/01/14. From its inception through 4/30/21, Colorado has collected $1.56 billion of state tax revenue from cannabis sales (source: Marijuana Policy Project).

PADRE – 40 years ago this week (6/09/81), San Diego State’s Tony Gwynn was selected in the pro baseball draft and the pro basketball draft on exactly the same day. MLB’s San Diego Padres selected Gwynn in the 3rd round, while hours later the NBA’s San Diego Clippers selected Gwynn in the 10th round. Gwynn went on to a 20-year Hall of Fame career with the Padres (source: San Diego Union-Tribune).