Bill’s By The Number$

Posted by: Kim Vo | Posted on: February 3rd, 2017 | 0 Comments

1. BETTER JANUARY – The S&P 500 index gained +1.9% (total return) in January 2017, breaking a streak of 3 consecutive Januarys that had produced a total return loss. Despite the slow start, the S&P 500 has gained +29.0% (total return) over the last 3 years (2014-15-16). 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. UPS AND DOWNS – The S&P 500 has gained +10.2% per year (total return) over the last 50 years (1967-2016) in spite of suffering through 8 bear markets of at least a 20% decline each time (source: BTN Research).

3. GOOD START – 66% of the individual stocks in the S&P 500 (328 in total) were up in January 2017, including 40 stocks that were up at least +10% and 4 stocks that gained at least +25% (source: BTN Research).

4. RENTERS SOAR – The 109.6 million households in the United States on 12/31/06 were split between 75.4 million owners and 34.2 million renters. The 118.6 million households in the United States on 12/31/16 were split between 75.6 million owners and 43.0 million renters (source: Census Bureau).

5. NOT AS GOOD AS WE THOUGHT – 54% of student loan borrowers have either defaulted or failed to pay down even $1 of principal on their outstanding debt over the last 7 years. Until an error was discovered in government calculations in January 2017, it was believed that just 34% of borrowers had either defaulted or had not reduced their debt in the last 7 years (source: Education Department).

6. MADE IN AMERICA – 43% of 2,000 adults surveyed believe that “free trade agreements” that the United States has negotiated with its trading partners have “helped their family finances” by positively impacting the jobs held by family members or by enhancing the consumer purchases made by the family (source: Pew Research Center).

7. BETTER OFF THAN MOM AND DAD – In 2014, 51% of 30-year old Americans earned more than their parents, i.e., comparing the 2014 before-tax income of children born in 1984 with that of their parents when they were 30 years old after adjusting the parents’ income for the impact of inflation. In 1970, 92% of 30-year old Americans earned more than their parents (source: Trends in Absolute Income Mobility Since 1940).

8. SHOULD BE MORE – 77% of 4,200 Americans surveyed are saving for their retirement, either through a pre-tax retirement plan or through personal after-tax accounts (source: Transamerica Center for Retirement Studies).

9. MILITARY READINESS – The size of the US Army today is at its smallest level since World War II. The size of the US Navy is at its smallest level since World War I. The average age of an Air Force plane is 27 years. The Air Force has a shortage of 700 pilots (source: The Heritage Foundation).

10. REFUGEES – The United States admitted 84,995 refugees into the country during fiscal year 2016 (i.e., the 12 months ending 9/30/16). The top 3 countries from where the refugees originated last year: the Democratic Republic of the Congo (16,370), Syria (12,587) and Burma (12,347) (source: Pew Research).

11. TOO MUCH DEBT – The International Monetary Fund (IMF) is projecting in its annual review of member economies that Greece’s “debt to GDP” ratio will increase to 170% by 2020 and to 275% by 2060. The IMF report states that Athens will require “substantial debt relief from its European creditors” (source: International Monetary Fund).

12. OUR DEBT – The USA’s national debt was 115% of the size of our economy at the end of fiscal year (FY) 1945 (end of World War II), but fell to 67% of the size of the economy within 10 years (i.e., end of FY 1955). Debt was 106% of the size of our economy as of 9/30/16, i.e., the end of FY 2016 (source: Congressional Budget Office).

13. OVER THE NEXT DECADE – The Congressional Budget Office (CBO) estimates that over the next 10 fiscal years (i.e., 2018-2027) the United States will take in $43.1 trillion of tax revenue but spend $52.5 trillion, i.e., a deficit of $9.4 trillion (source: CBO).

14. SUPER BET – Prior to yesterday’s Super Bowl # 51, the underdog had won just 16 of 50 games, but had won 6 of the last 9 games. The Atlanta Falcons were 3 point underdogs in yesterday’s game (source: BTN Research).

15. EIGHTEEN-YEAR WAIT – 13 of 32 NFL football teams have never won the Super Bowl, including the Atlanta Falcons, the underdog in yesterday’s Super Bowl # 51. Atlanta’s only other appearance in the championship game was Super Bowl # 33 (played 1/31/99), the last game of quarterback John Elway’s 16-year Hall of Fame career with Denver (source: BTN Research).

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