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Bill’s By The Number$

Posted by: Kim Vo | Posted on: August 1st, 2016 | 0 Comments

1. SINCE THE DOWNGRADE – Friday (8/05/16) is the 5-year anniversary since the United States was downgraded by S&P from a top credit rating on 8/05/11. Since 8/05/11, the yield on the US 10-year Treasury note has fallen from 2.57% to 1.45% and the S&P 500 has gained +101.8% on a total return basis. 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. TIME IN THE STOCK MARKET – If you selected any single month at random to invest in the S&P 500 (at the close of the prior month) during the 25-years ending 6/30/16, you achieved a positive total return 65% of the time. If you extend your investment time horizon to just 1 year, you achieved a positive total return 81% of the time. If your time horizon was 2 years, you achieved a positive total return 80% of the time (source: BTN Research).

3. BEST THIS YEAR – The # 1 performing individual stock within the S&P 500 during the first 7 months of 2016 has gained +144.6%. That same stock lost 4.8% in 2015, ranking # 273 of 500 stocks (source: BTN Research).

4. BEST LAST YEAR – The # 1 performing individual stock within the S&P 500 during calendar year 2015 gained +134.4% last year. That same stock lost 20.2% in the first 7 months of 2016, ranking # 481 of 500 stocks so far this year (source: BTN Research).

5. WHO CARES? – The CBO predicted on 6/16/15 that “debt held by the public” would exceed the size of the US economy in 2039, a forecast that was revised on 7/12/16 to 2033 (source: Congressional Budget Office).

6. MORE OUT THAN IN – The trust fund backing Social Security retirement benefits took in payroll tax contributions that exceeded retirement benefit payments made to retirees for the 26 consecutive years of 1984-2009. Since 2010, benefits paid have exceeded payroll taxes collected. In 2015, covered workers paid in $679.5 billion of payroll taxes, but retirees received $742.9 billion of benefit payments (source: SS Trustees 2016 Report).

7. IMPACT OF BOOMERS – There are 2.8 workers (paying payroll taxes) for every one Social Security beneficiary in 2016, i.e., there are 36 Social Security beneficiaries for every 100 covered workers today. There will be an estimated 2.3 workers (paying payroll taxes) for every one Social Security beneficiary in 2030, i.e., there will be 44 Social Security beneficiaries for every 100 covered workers in 2030 (source: SS Trustees 2016 Report).

8. RISING GREENBACK – 8 years ago, the Euro peaked at $1.6038 (on 7/15/08). Last Friday (7/29/16), the Euro closed at $1.1175. A weaker Euro (i.e., stronger US dollar) has a negative impact on US exporters, a critical factor to many American companies since 46% of the revenues of the average S&P 500 company come from foreign sales (source: Standard & Poor’s).

9. OIL ACTIVITY COMEBACK – The operating oil rig count in the United States was 698 as of 12/31/15 and then fell for the first 20 weeks of 2016 (through 5/20/16) to bottom at 404. More recently the oil rig count has now increased each week for the last 5 consecutive weeks, finishing Friday 7/29/16 at 463 operating rigs (source: Baker Hughes).

10. RECORD LOW YIELDS – The just completed month of July 2016 had the lowest closing yield on the 10-year Treasury note (1.36%) and the 30-year Treasury bond (2.10%) in history, both occurring on Friday 7/08/16 (source: Treasury Department).

11. NEW vs. OLD – The median sales price of a new home sold nationwide during June 2016 was $306,700. The median sales price of an existing home sold nationwide during June 2016 was $247,700. Thus, the premium paid for a new home vs. an existing home was +24% (source: Census Bureau, National Association of Realtors).

12. WE’RE GLOBAL – Trade, defined as the combination of US exports and US imports, was $5.02 trillion in 2015, 28% of our $18.16 trillion economy as of 12/31/15. Trade was $1.69 trillion in 1995, 22% of our $7.80 trillion economy as of 12/31/95 (source: Commerce Department).

13. PLEASE WATCH THE ROAD – Only 14 US states prohibit all drivers from using hand-held cell phones while driving. 46 US states ban text messaging for all drivers (source: Governors Highway Safety Association).

14. IMPACT OF BREXIT – 71% of economists surveyed after the 6/23/16 UK referendum vote believe that the United Kingdom will slip into a recession within a year (source: Bloomberg).

15. H.O.F – Baseball’s Mike Piazza, the # 1,390th pick of the 1988 draft, is the lowest drafted player elected to the Hall of Fame. Paul Bacosa, drafted right before Piazza, never played a major league game (source: MLB).

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