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Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: June 9th, 2014 | 0 Comments

  1. WHAT HAVE YOU DONE FOR ME LATELY? – The individual stock that was ranked # 3 (out of all 500 stocks in the S&P 500) during calendar year 2013 while gaining +237%, fell to # 497 (out of 500) during the first 5 months of calendar year 2014 while losing 31%, i.e., the stock was # 3 “from the top” last year but has fallen to # 3 “from the bottom” in a span of just 5 months.  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 THE BEAR – The last bear market began after the S&P 500 peaked on 10/09/07.  In the 50 trading days prior to 10/09/07, the S&P 500 had 12 trading days that produced at least a +1% gain (source: BTN Research).
  3. BEFORE NOW – In the 50 trading days prior to last Friday 6/06/14, the S&P 500 has had 2 trading days that produced at least a +1% gain (source: BTN Research).
  4. YIELDS AND BEARS – During each of the last 2 bear markets for stocks, the yield on the 10-year Treasury note dropped significantly.  When the S&P 500 fell by 49% over the 30 ½ months from 3/24/00 to 10/09/02, the yield on the 10-year note went from 6.20% to 3.61%.  When the S&P 500 fell by 57% over the 17 months from 10/09/07 to 3/09/09, the yield on the 10-year note went from 4.67% to 2.89% (source: BTN Research).
  5. TWO OUT OF THREE – 65% of all individual tax returns filed in 2011 (95.0 million out of 145.4 million) reported less than $50,000 of adjusted gross income (source: Internal Revenue Service).
  6. I’M BIGGER THAN YOU – Outstanding student loans were $1.11 trillion as of 3/31/14.  Outstanding credit card debt was $857 billion as of 3/31/14.  Student loans have increased $124 billion in the last 12 months while credit card debt has increased just $7 billion over the same period (source: Federal Reserve).
  7. HALF AS MANY – Lenders repossessed 119,429 homes nationwide (an average of 995 per day) during the first 4 months of 2014 (i.e., January-April), a 50% drop compared to the 236,977 homes repossessed during the first 4 months of 2012 (source: RealtyTrac).
  8. DON’T TRY IT – IRS Notice 2013-54 (issued 9/13/13) states that “employer payment plans” do not satisfy the requirement of large employers to provide health insurance coverage for its full-time employees under the Affordable Care Act (ACA).  Some employers had incorrectly concluded that they would meet the ACA definition of “providing health coverage” to its full-time employees by giving the employee a lump-sum of money from which the employee could buy either individual health insurance or health coverage through an exchange.  Failure to “provide health coverage” subjects a large employer to fines of $100 per employee per day (source: IRS).
  9. THE BEST WE CAN HOPE FOR? – Over the last 40 years (1974-2013), government outlays have averaged 20.5% of the size of the US economy while tax revenues have averaged 17.4% of the size of the US economy, an average shortfall (i.e., deficit) of 3.1% of the size of the economy (source: Congressional Budget Office).
  10. TIME FOR REFORM – From 1984 through 2008, the Social Security payroll taxes paid by Americans exceeded the benefit payments made by Social Security.  However since 2009, benefits paid have exceeded taxes collected, including a $51 billion shortfall in 2013 (source: Social Security).
  11. GUT FEELING – More than half (56%) of 1,000 Americans at least age 25 that were surveyed earlier this year have never attempted (nor has their spouse attempted) to calculate how much they will need to accumulate for their eventual retirement (source: Employee Benefit Research Institute).
  12. COMFORTABLE WITH MORE RISK – $366 billion of corporate junk bonds were issued in 2013, an all-time record amount.  Junk bonds are debt offerings of companies rated Ba or lower (by Moody’s) and involve investment risks which may include the loss of principal invested as a result of default (source: Dealogic).
  13. WERE YOU AVERAGE? – The net worth of an average American increased by +10.8% over the 12 months ending 3/31/14, including gains from stocks, bonds and real estate holdings (source: Federal Reserve).
  14. JOBS – The number of employed Americans (i.e., nonfarm) peaked at 138.365 million on 1/31/08, fell 8.7 million to 129.655 million on 2/28/10, but has bounced back to 138.463 million on 5/31/14 (source: Department of Labor).
  15. I’LL BET YOU – If California Chrome won the Belmont Stakes last Saturday (6/07/14), he became the first Triple Crown winner since 1978 and the 12th all-time.  8 of the 11 Triple Crown winners were born in Kentucky but none were born in California, the home state of California Chrome (source: BTN Research).

 

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