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Bill’s By The Number$

Posted by: Kim Vo | Posted on: September 26th, 2016 | 0 Comments

1. LONG TERM vs. SHORT-TERM – The all-time closing high for the S&P 500 was 2190 on 8/15/16. The average return for the index for the 5 years ending 8/15/16 was +15.2% per year (total return), half again as large as the +9.7% per year average for the index over the last 50 years (1966-2015). 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. BEFORE IT TURNED UP – Before beginning a bull market run in March 2009 that has produced annual gains of +19.2% (total return) over each of the last 7 ½ years, the S&P 500 closed at a bear market low of 677 on 3/09/09. The average return for the stock index for the 2 years ending 2/28/09 (just 9 days before the bottom in the stock market) was a loss of 26.1% per year on a total return basis (source: BTN Research).

3. BEFORE IT TURNED DOWN – Before beginning a 17-month long bear market tumble of 57% that started in October 2007, the S&P 500 closed at a bull market high of 1565 on 10/09/07. The average return for the index for the 5 years ending 9/30/07 (just 9 days before the peak in the stock market) was a gain of +15.5% per year on a total return basis (source: BTN Research).

4. POST-BREXIT – In the first 2 trading days following the 6/23/16 “Brexit” vote in the UK, the S&P 500 dropped 5.3% (total return). Since then, the S&P 500 has gained +8.8% (total return) through the close of stock trading as of last Friday 9/23/16, 3 months to the day following the referendum vote (source: BTN Research).

5. HUGE – The US stock market was worth $23.7 trillion as of 6/30/16. The S&P 500 made up 81% of the total US stock market capitalization as of 6/30/16, equal to $19.2 trillion (source: BTN Research).

6. BIGGER THAN HUGE – The US bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $40.7 trillion as of 6/30/16. The US bond market was worth $12.4 trillion as of 12/31/96 (source: Securities Industry and Financial Markets Association).

7. DOUBLE-DOUBLE – Fiscal year 2017 (10/01/16 to 9/30/17) begins this Saturday. The US government is projecting outlays of $4.073 trillion for the upcoming 12 month period. Outlays have grown from $1 trillion in 1987 to $2 trillion in 2002 to a projected $4 trillion in 2017 (source: Office of Management and Budget).

8. NEED TO CHANGE THIS – The top marginal corporate tax rate in the United States is the 3rd highest in the world out of 188 countries. Only the United Arab Emirates (UAE) and Puerto Rico have a top marginal corporate tax rate that is higher than the USA’s (source: Tax Foundation).

9. EXPENSIVE TO LIVE – 11% of American homeowners spend at least 50% of their pre-tax income on their housing costs. 26% of American renters spend at least 50% of their pre-tax income on their housing costs (source: Joint Center for Housing Studies at Harvard University).

10. AT LEAST THAT MUCH – 24% of 1,000 pre-retirees surveyed in the first quarter 2016 believe they will need to accumulate at least $1 million in order to “live comfortably” during their retirement years, up from 15% in 2005 (source: Employee Benefit Research Institute Retirement Confidence Survey).

11. BLUE – If Hillary Clinton wins the November 2016 presidential election, Democrats will occupy the White House for at least 12 consecutive years. That would be the longest stretch in the White House for the Democrats since FDR and Harry Truman led the country for the 20 consecutive years of 1933-1952 (source: BTN Research).

12. RED – If Donald Trump wins the November 2016 presidential election, he will become just the 4th president in history to be elected to the nation’s highest office without any prior political experience. The other 3 – Zachary Taylor, Ulysses S. Grant and Dwight Eisenhower – all had high level military experience (source: BTN Research).

13. ONE PERCENTER – It took at least $465,626 of adjusted gross income during tax year 2014 (i.e., the most recent year that tax data has been collected) to rank in the top 1% of wage earners (source: Internal Revenue Service).

14. WE WILL SEE – Federal Open Market Committee (FOMC) data that was released following their 9/21/16 meeting indicates the Fed expects that its target rate for short-term interest rates will be 1.5 percentage points higher by 12/31/18, i.e., suggesting 6 separate increases of ¼ of 1 percentage point each (source: FOMC).

15. SPORTS FAMINE – The Seattle Mariners are 2 games out of the American League wildcard spot as of games played through Thursday night 9/22/16. The Mariners’ post season drought is the longest in baseball today, having last made the playoffs in 2001 (source: Major League Baseball).

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