Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: March 14th, 2022 | 0 Comments

STOCKS AND INFLATION – During the 16 highest inflation years over the last 100 years, i.e., 1922-2021, the S&P 500 has been “up” 8 years and “down” 8 years. The index’s average return for all 16 years is a gain of +3.9% per year (total 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. The “Consumer Price Index” was used as the inflation benchmark (source: BTN Research).

SINCE THEN – President Donald Trump declared the coronavirus pandemic a “national emergency” on Friday 3/13/2020. Over the 2-years since then, i.e., Monday 3/16/2020 through Friday 3/11/2022, the S&P 500 gained +60.0% (total return), in spite of a 12.0% loss (total return) on Monday 3/16/2020 (source: BTN Research).

ADDING TO CASH – Money market funds in the United States (including retail and institutional funds, both taxable and tax-free) have increased $799 billion (to $4.6 trillion from $3.8 trillion) over the trailing 24 months as of last Friday 3/11/2022, an average increase of $1.1 billion a day. President Donald Trump declared a national emergency as a result of the pandemic on Friday 3/13/2020 (source: Investment Company Institute).

FIRST OF MANY? – The Federal Reserve is widely expected to raise short-term interest rates this Wednesday (3/16/2022), in what would be its first rate hike since 12/19/2018. The rate hike on 12/19/2018 was the Fed’s 8th rate increase implemented over a 2-year period that began on 12/14/2016 (source: Federal Reserve).

LESS THAN WHAT YOU THINK – The average single family home in the United States has appreciated just +4.7% per year over the 25 years from 12/31/1996 to 12/31/2021 (source: Federal Housing Finance Agency).

READY FOR A CHANGE – 27.1 million Americans moved last year, 8.4% of the US population. That’s the lowest percentage of Americans that reported living at a different residence based on an annual survey conducted since 1948. Of the 27.1 million movers in 2021, just 4.4 million people moved out-of-state. 25 years earlier (1996), 16.3% of Americans moved in the prior 12 months (source: Census Bureau).

THE AVERAGE WORKER – Average hourly earnings in the private sector (nonfarm) reached $31.58 an hour as of 2/28/2022, up +5.1% on a year-over-year basis. 10 years earlier (2/29/2012), average hourly earnings in the private sector were $23.27 an hour (source: Bureau of Labor Statistics).

WORKING FULL-TIME – The number of Americans with full-time jobs peaked at 5 million as of 2/29/2020 (pre-pandemic), fell to 130.5 million as of 4/30/2020, and has since rebounded to 150.4 million as of 2/28/2022 (source: Bureau of Labor Statistics).

MAXED OUT – Only 8.5% of workers who have access to an employer-sponsored defined contribution plan, e.g., 401(k) plan, contribute the maximum amount permitted by law (source: Congressional Research Service).

EDUCATION – 62% of American adults have received education beyond high school, including adults with some college credits all the way to those adults who have earned a doctoral degree (source: Census Bureau).

HIGHEST PRICE FOR CRUDE OIL – The price of West Texas Intermediate (WTI) crude oil reached its highest level ever at $147.27 a barrel on 7/11/2008, less than a month before Russian forces invaded the former Soviet republic of Georgia on 8/08/2008. That conflict lasted just 5 days. WTI crude closed at $123.70 a barrel last Tuesday 3/08/2022, 12 days after Russia invaded Ukraine (source: Atlantic Council).

IMPORTS FROM RUSSIA AND CHINA – US consumers imported $29.7 billion of goods from Russia in 2021. US consumers imported $506.4 billion of goods from China in 2021 (source: Department of Commerce).

DO THE CALCULATION – An individual turning age 72 during calendar year 2022 can delay his/her first “required minimum distribution” (RMD) from pre-tax retirement plans until 3/31/2023, but then he/she will need to take a 2nd RMD as of 12/31/2023. The 12/20/2019 SECURE Act changed the age requirement to begin RMDs from age 70 ½ to age 72. See a tax expert for details (source: SECURE Act).

CRYPTO – President Joe Biden signed an executive order on Wednesday 3/09/2022 that sets in motion the research and development of an American “Central Bank Digital Currency” (CBDC). 19% of US small businesses expect to offer cryptocurrencies as a payment option in 2022 (source: White House).

GOLFERS – 2 of the top 3 male golfers in the world are not Americans, i.e., # 1 ranked Jon Rahm (Spain) and # 3 ranked Viktor Hovland (Norway). 2 of the top 3 female golfers in the world are not American, i.e., # 1 ranked Jin Young Ko (Korea) and # 3 ranked Lydia Ko (New Zealand) (source: Official World Golf Rankings, Rolex Rankings).