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Bill’s By The Number$

Posted by: Kim Vo | Posted on: February 13th, 2017 | 0 Comments

1. HISTORICAL PERSPECTIVE – Since 1950, there have been 58 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, 1952-61 . . . , 2007-2016). The S&P 500 index produced an average annual total return of less than +7% during 15 of the 58 decade-long periods (26% of the time). 19 of the 58 periods (33% of the time) resulted in an average annual total return of at least +14%. 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. KEEP GOING – The bull market for the S&P 500 will reach 8 years in length as of Thursday 3/09/17. Through last Friday 2/10/17, the S&P 500 has gained +305% (total return) during its bull run (source: BTN Research).

3. A LOT MORE SPENDING – Outlays of the US government are projected to grow +65% over the next decade (i.e., FY 2017 to FY 2027). Mandatory outlays are projected to grow +73%, discretionary outlays are projected to grow just +22% while interest costs are projected to grow +184% (source: Congressional Budget Office).

4. YOU DO THE MATH – The 4.8% unemployment rate for January 2017 that was reported by the government on 2/03/17 is based upon a survey of 60,000 households that was completed during the week of 1/08/17. The employment status of the individuals in those 60,000 households is then extrapolated to project national figures for our country’s actual 118.6 million households (source: Department of Labor).

5. TAKES TIME – From President Ronald Reagan’s State of the Union challenge on 1/25/84 “to simplify the entire tax code so all taxpayers are treated more fairly,” it took 2 ¾ years until the Tax Reform Act of 1986 was signed into law by Reagan on 10/22/86 (source: New York Times).

6. SHORT-TERM – 37% of Treasury debt at the end of FY 2016 (9/30/16) had a maturity of 2 years or less, i.e., debt that will mature by 9/30/18 and will either have to be rolled over or paid off (source: Treasury Department).

7. NOT QUITE FREE TRADE – The United States exported more goods and services in calendar year 2016 to the United Kingdom and Japan ($119 billion of combined exports) than we exported to China ($116 billion). The population of China (1.39 billion people) is 7 times the size of the 192 million individuals living in the United Kingdom and Japan combined (source: Department of Commerce).

8. WOULD THEY HOLD UP? – The Federal Reserve will conduct a “stress test” on 34 of the largest financial institutions and report their findings by 6/30/17. The financial modeling will analyze how the firms would respond if GDP fell 6.5% by the 2nd quarter 2018, stock prices fell 50% by the end of 2017, unemployment rises to 10% during 2018 and housing prices fell 25% (source: Federal Reserve).

9. ABOVE THE MAX – Earnings up to $127,200 in 2017 are subject to employee-paid payroll taxes of 6.2% that support Social Security benefits. An estimated 6% of American workers will make more than $127,200 in 2017 (source: Social Security Administration).

10. MAKE A LOT, PAY A LOT – The top 10% of US taxpayers (based upon 2014 tax data) reported adjusted gross income (AGI) of at least $133,445, received 47% of the AGI reported in the United States and paid 71% of all federal income taxes collected in 2014 (source: Internal Revenue Service).

11. ON TRACK – More than 3 of every 5 adults surveyed (62%) are either “very confident” or “somewhat confident” that their saving and investing habits will allow them to retire with a “comfortable lifestyle.” 4,200 American adults were surveyed for this report (source: Transamerica Center for Retirement Studies).

12. FRUITS AND VEGETABLES – 78.1% of “hired crop workers” on farms in the United States are foreign-born individuals (source: Center for Disease Control).

13. LOVE THOSE GRANDKIDS – The 81% of grandparents that provided cash gifts to their grandchildren over the past year gave an average of $2,383 not counting non-cash gifts such as child care or transportation (source: TD Ameritrade).

14. DON’T KNOW THE MEANING – 38% of 1,011 adults surveyed could not select the correct definition of a health insurance deductible (source: UnitedHealthcare).

15. SPRING IS IN THE AIR – Training camps for major league baseball teams open this week. The minimum salary for a major league baseball player for 2017 is $535,000. To rank in the top 1% of all US taxpayers (based upon 2014 tax data) required an adjusted gross income level of at least $465,626 (source: MLB).

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