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Bill’s By The Number$

  1. STOCK CORRECTION – After closing at an all-time high of 16,057 on 11/19/2021, the NASDAQ Composite index has fallen 14.2% (total return) over the next 2 months to close at 13,769 on Friday 1/21/2022. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).
  1. UP/DOWN – The S&P 500 index has been up 40 of the last 50 years, i.e., 1972-2021, gaining an average of +11.1% per year (total return).  The stock index has produced an average annual gain of +18.8% (total return) during the 40 “up” years while losing an average of 14.8% per year (total return) during the 10 “down” years. The S&P 500 is down 7.7% YTD (total return) through Friday 1/21/2022.  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).
  1. WAS IT A BUBBLE? – The US stock market was worth $53.4 trillion as of 12/31/2021, 3 times the size of our $23.2 trillion economy. At the peak of the “Dot-Com” stock bubble in March 2000, the US stock market was worth 1.4 times the size of the US economy (source: Fund Manager Julien Bittel).
  1. COUNTED IN BOTH INDEXES – All 30 individual stocks in the Dow Jones Industrial Average are part of the S&P 500 index. The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy (source: BTN Research).
  1. WHICH SHOULD YOU FOLLOW? – As of 12/31/2021, the S&P 500 represents 79% of the stock market capitalization of the entire US stock market, i.e., $42.4 trillion of $53.4 trillion. As of 12/31/2021, the 30 stocks that make up the Dow Jones Industrial Average represents just 22% of the stock market capitalization of the entire US stock market, i.e., $12.0 trillion of $53.4 trillion (source: BTN Research).
  1. A MILLION LESS – In the fall of 2019 (pre-pandemic), 15.47 million undergraduates were enrolled in college. In the fall of 2021, 14.44 million undergraduates were enrolled (source: Nat’l Student Clearinghouse Research Ctr.).
  1. NOT DONE YET – In 2008-2009, Congress authorized spending of $983 billion to alleviate the impact of the global mortgage crisis, an amount equal to 6% of the size of the $15.2 trillion US economy. In 2020-2021, Congress authorized spending of $5.73 trillion to alleviate the impact of the global pandemic, an amount equal to 25% of the size of the $23.2 trillion US economy (source: Committee for a Responsible Federal Budget).
  1. POLITICAL TREND12 of the last 13 US presidents going back to World War II, i.e., Truman through Trump, saw his party lose House seats in the midterm elections during his 1st term in office. g., 40 Republican seats were lost in the House in November 2018 (Donald Trump’s midterm) while 63 Democratic seats were lost in the House in November 2010 (Barack Obama’s first midterm) (source: The American Presidency Project).
  1. FED JOBS – President Biden nominated 3 individuals – Sarah Bloom Raskin, Lisa Cook and Philip Jefferson – on Friday 1/14/2022 to fill vacant positions on the Fed’s 7-member Board of Governors (source: White House).
  1. RISING PRICES, BOTH IN AND OUT – US import prices rose +10.4% in 2021, the largest year-over-year percentage increase since 2007. US export prices rose +14.7% in 2021, the largest year-over-year percentage increase in history based on data tracked since 1984 (source: Bureau of Labor Statistics).
  1. CARS IN DEMAND – The price of “new vehicles” increased +11.8% in 2021, dwarfed by the +37.3% increase in the price of “used cars and trucks” last year (source: Bureau of Labor Statistics).
  1. OIL USAGE – The government predicted on 1/11/2022 that US oil production of crude oil will reach 12.4 million barrels a day in 2023, setting an all-time record high. US oil production was 11.8 million barrels a day as of the final week of calendar year 2021, the highest level achieved last year (source: Energy Info. Admin.).
  1. THE AVERAGE AMERICAN WORKER – US private sector workers earned an average of $31.31 per hour as of December 2021 (source: Bureau of Labor Statistics).
  1. GOING MY WAY? – The 3 most popular states to move into during 2021 were Texas, Florida and Tennessee. The 3 states with the greatest outflow of people during 2021 were California, Illinois and Pennsylvania.  The rankings are based on more than 2 million rentals of moving trucks last year that involved a “1-way” interstate movement of furnishings, personal belongings and clothing (source: U-Haul Migration Trends 2021).
  1. MAYBE THIS YEAR? – Of the 8 NFL teams remaining in the playoffs as of Friday 1/21/2022, 3 football teams have never won a Super Bowl – the Buffalo Bills, the Tennessee Titans and the Cincinnati Bengals (source: NFL).

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Bill’s By The Number$

  1. INVEST FOR THREE YEARS – Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 94 separate 3-years beginning 1926-28, then 1927-29, . . . 2019-21) have produced a positive return. 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).
  1. YEAR TWO IN THE WHITE HOUSE – This year (2022) is the 2nd year of Joe Biden’s 1st 4-year presidential term. The S&P 500 index has been positive on a total return basis during 15 of the last 24 “presidential 2nd-years,” i.e., 2nd-years dating back to 1929.  The average performance for the S&P 500 index during the last 24 “presidential 2nd-years” has been a gain of just +6.7% (total return) (source: BTN Research).
  1. YOU’RE HIRED – US employers added 6.45 million new jobs in 2021, an average gain of 537,000 new jobs created each month. The smallest monthly jobs gains took place in December 2021 when just 199,000 new jobs were reported.  By year-end 2021, 149.0 million Americans had full-time jobs (source: Department of Labor).
  1. POWER TO THE WORKERAverage hourly earnings of employees in the private sector rose by +4.7% in 2021, on top of a +5.5% gain in 2020. This advancement of wages during a nationwide pandemic, a 2-year average wage gain of +5.1% per year, was double the +2.5% annual gain in average hourly earnings over the preceding 13 years, i.e., 2007-2019 (source: Department of Labor).
  1. HASN’T BEEN ENOUGH – Only 1 out of every 6 workers surveyed in December 2021 (17%) believe they received pay raises during 2021 that allowed them to “keep up with inflation.” 5,365 workers were interviewed for this survey (source: Momentive Poll December 2021).
  1. WAS LOW BEFORE – Inflation, as measured by the “Consumer Price Index” (CPI), was up +7.0% in 2021 after rising just +1.4% in 2020. The +7.0% annual inflation was the highest calendar year inflation since 1981 and was the highest year-over-year inflation since June 1982 (source: Department of Labor).
  1. RUSH TO BUY – Americans borrowed a record $1.61 trillion from mortgage lenders in 2021 to purchase homes, breaking the previous record high for purchase loans of $1.51 trillion set in 2005. The purchase loan total does not include individuals who refinanced existing mortgages (source: Mortgage Bankers Association).
  1. THEY OWN IT NOW – Banks foreclosed on just 25,662 homes nationwide in 2021, down 49% from 50,238 foreclosures in 2020 and down 82% from 143,955 foreclosures in 2019. The worst single year of foreclosures in US history was 1,050,500 foreclosures in calendar year 2010 (source: ATTOM Data Solutions).
  1. A LOT FEWER – There were 1.53 million homes for sale nationwide as of 12/31/2018. Nearly 3 years later, there were 1.11 million homes for sale nationwide as of 11/30/2021 (source: National Association of Realtors).
  1. BRAND NEW CAR – Americans bought 15 million new vehicles in 2021, down from 17 million purchases completed pre-pandemic in 2019. Automakers have blamed a semiconductor chip shortage as a key factor behind their manufacturing problems (source: Cox Automotive).
  1. LEGAL EXCLUSION – Employees that obtain health insurance coverage through their employer do not pay federal income taxes (or payroll taxes) on the economic benefit of that part of their health insurance that is paid for by the employer. The exclusion from taxation of this economic benefit saves US taxpayers $280 billion a year, the largest tax expenditure in the US tax code (source: Congressional Budget Office).
  1. TOP TEN AND EVERYONE ELSE – The top 10% of US taxpayers in tax year 2019 made at least $154,589 of adjusted gross income (AGI), received 47% of all AGI nationwide and paid 71% of all federal income tax (FIT) collected for the 2019 tax year. The bottom 90% of US taxpayers in tax year 2019 made less than $154,589 of AGI, received 53% of all AGI nationwide and paid 29% of all FIT collected for the 2019 tax year (source: IRS).
  1. ESTATE TAXES – The maximum amount that a deceased individual may pass onto his/her heirs federally estate-tax free (with proper planning) rose to $12.06 million in 2022, up from $11.7 million in 2021. The limit was $1 million in 2002 or 20 years ago.  Please consult a tax expert for details (source: Internal Revenue Service).
  1. SAFE MONEY – From 1/01/20 (before the pandemic) to 1/05/22, the size of the money market fund industry in the USA (both taxable and tax-free) rose from $3.6 trillion to $4.7 trillion (source: Investment Co. Institute).
  1. GO DAWGS – ESPN college football analyst David Pollack predicted on 8/28/21 that Alabama would beat Georgia in the SEC Championship game, but Georgia would beat Alabama in the national title game (source: ESPN).

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Bill’s By The Number$

  1. WASHINGTON AND WALL STREET – Democrat Joe Biden began his second calendar year as POTUS # 46 last week. Democrats also maintain their control of Congress with a voting majority in the House and Senate.  Over the last 60 years (1962-2021), the S&P 500 has gained +11.9% per year (total return) when one party controls the White House, the Senate and the House.  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).
  1. AFTER THAT – The S&P 500 was up +11.0% (total return) for the 4th quarter 2021, the 19th time in the last 30 years (1992-2021) that the index has had at least a +10% gain (total return) in a quarter. Following the previous 18 quarters when the index was up double-digits, the next quarter was up 17 of 18 times (source: BTN Research).
  1. WORTH MANY TRILLIONS – The US stock market grew by $12 trillion in calendar year 2021, from $41 trillion as of 12/31/2020 to $53 trillion as of 12/31/2021. 10 years ago (12/31/2011), the US stock market was worth just $16 trillion (source: Siblis Research).
  1. A SINGLE STOCK – The largest capitalized individual stock in the US reached $3 trillion on 1/03/2022. 40 years ago (1982), the total market capitalization of all stocks in the world was $2.7 trillion (source: Wordbank.org).
  1. PROTECTING THE DOWNSIDE – There were more put option contracts outstanding (more than 200 million) at the end of 2021 on US individual stocks, ETFs (exchange-traded funds) and stock indices than at any time in history based on records maintained since 2009 (source: CBOE Global Markets).
  1. ONE RIGHT, ONE WRONG – Savita Subramanian, Head of US Equity and Quantitative Strategy at Bank of America, predicted on 12/21/20 that the S&P 500 would end calendar year 2021 at 3800 and that the yield on the 10-year Treasury note would finish the year at 1.50%. As of 12/31/2021, the S&P 500 closed at 4766 and the closing yield on the 10-year note was 1.496% (source: Barron’s).
  1. NOT DOING A LOT – The current session of Congress (the 117th, running from 1/03/2021 to 1/03/2023), has passed only 81 bills with a year to go. The fewest number of bills passed in any 2-year session of Congress going back to 1973 is 284 during the 112th session of Congress that ran from 2011-2012 (source: GovTrack.us).
  1. DEBT – The United States increased its national debt by $9.64 trillion in the last 5 years, i.e., 2017-21, rising from $19.977 trillion (12/31/2016) to $29.617 trillion (12/31/2021) (source: Treasury Department).
  1. DOWN FROM A TOP5,079 retail stores closed nationwide in 2021, down from an all-time record 12,200 store closures in 2020 (source: CoStar Group).
  1. PAY NOTHING – 32% of the 148.2 million tax returns that were filed for tax year 2019 (the latest year for which data has been released) did not pay any federal income tax, a total of 46.7 million tax returns (source: IRS).
  1. DUE IN APRIL – Tesla founder Elon Musk claims that as a result of exercising stock options in 2021 that were awarded to him in 2012, he will pay over $11 billion in federal income tax when he files his 2021 individual income tax return, the largest federal income tax bill for any individual in US history. Musk received 26.4 million non-qualified stock options in 2012, allowing him to buy his company’s stock at $6.24 a share at any time before August 2022.  Musk is the richest person in the world, worth $263 billion as of 1/07/2022 (source: CNBC).
  1. NECESSARY SKILLS – Utah has the top financial literacy requirement for its high school students of any of the 50 US states. Utah requires all of its high school students to take a half-year course dedicated to personal finance, and then to take a final exam administered by the state.  Ohio is the latest US state to add some form of financial literacy instruction at the high school level, effective 1/27/2022 (source: Champlain College Inc.).
  1. MAYBE, MAYBE NOT – 37 states do not tax Social Security benefits, while the other 13 states may or may not tax Social Security benefits dependent on other facts, e.g., an individual’s total income (source: USA Today).
  1. HAS NEVER BEEN LOWER – 5 states (Georgia, Nebraska, Oklahoma, Utah and West Virginia) recorded their lowest unemployment rates ever in November 2021. State jobless rates have been tracked nationwide since 1976 (source: Bureau of Labor Statistics).
  1. WHO WINS? – It’s Alabama vs. Georgia in college football’s national championship game tonight (1/10/2022). An Alabama victory would give Nick Saban his 8th national title as a head coach.  His 7 current titles (6 with Alabama and 1 with LSU) is the most in college football history (source: NCAA).

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Bill’s By The Number$

  1. FOR THE YEAR – The S&P 500 gained +28.7% (total return) during 2021, the 13th year in the last 25 years that the $42.4 trillion index has returned at least +15% (total return) for the calendar year. 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).
  1. LONG-TERM – The S&P 500 has gained an average of +11.1% per year (total return) over the last 50 years (i.e., 1972-2021). The index has been positive in 17 of the last 19 years.  Over the long-term, the S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).
  1. HIGH-FLYERS – The NASDAQ Composite gained +22.2% (total return) in 2021 and has gained +142.0% (total return) over the last 3 years (2019-2021), equal to +34.3% per year and its best 3-year run since 1997-1999. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. BOND INDEX – The taxable bond market was down 1.5% in 2021 (total return) but has gained +6.9% per year (total return) over the last 45 years (1977-2021). 2021 was the 4th down year for bonds in the last 45 years.  The “down” years were 1994, 1999, 2013 and 2021.  The Bloomberg Barclays US Aggregate Bond Index, calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement.  The index is a major benchmark for US bond investors (source: Bloomberg Barclays).
  1. SMALL LOSS – The 1.5% loss (total return) for Bloomberg Barclays US Aggregate Bond Index in 2021 follows its 2-year gain of +16.9% (total return) in 2019-20, the best “back-to-back” years for the bond index since 2001-2002. The widely followed bond index was created in 1986 but has released backdated performance history calculated to 1976 (source: Bloomberg Barclays).
  1. TIME IN THE MARKET – Since 1950 (i.e., 1950-2021), the S&P 500 index has been up 54% of 18,118 trading days, 61% of 864 months, 67% of 288 quarters and 74% of 72 years (source: BTN Research).
  1. MISSING THE BEST – The total return for the S&P 500 over the last 30 years (1992-2021) was a gain of +10.6% per year (total return). If you missed the 30 best percentage gain days over the last 30 years (i.e., 30 days in total, not 30 days per year), the +10.6% annual gain falls to a +4.4% annual gain (source: BTN Research).
  1. AVOID THE WORST – The total return for the S&P 500 over the last 30 years (1992-2021) was a gain of +10.6% per year (total return). If you avoided the 30 worst percentage days over the last 30 years (i.e., 30 days in total, not 30 days per year), the +10.6% annual gain rises to a +18.2% annual gain (source: BTN Research).
  1. JOBLESS – The lowest (3.5%) and the highest (14.7%) unemployment rates in the United States since 1970 occurred 2 months apart in 2020. Our jobless rate in November 2021 was 4.2% (source: Department of Labor).
  1. NEW HOMES – The median sales price ($416,900) and the average sales price ($481,700) of new homes sold in the United States both reached all-time record highs in November 2021, both on a nominal basis and on an inflation adjusted basis. A decade earlier (November 2011), the median sales price was $214,100 and the average sales price was $242,900 (source: Census Bureau).
  1. LIVING JUST A LITTLE LESS – The life expectancy at birth of an American baby in 2020 was 77.0 years, down 1.8 years from 78.8 years in 2019 and the largest single-year life expectancy decline since 1943. The 2020 life expectancy number is just under the 2003 life expectancy of 77.1 years (source: Center for Disease Control).
  1. TEN-YEAR TREASURY NOTE – The yield on the 10-year US Treasury note ended calendar year 2021 at 1.496%, up 0.583 percentage points from its 12/31/2020 close of 0.913%. The 10-year Treasury note yield was 0.501% on Monday 3/09/2020, its lowest closing yield ever.  10-year notes have been traded in the USA since 1790, i.e., 231 years of trading (source: Treasury Department).
  1. HOUSING – The average interest rate nationwide on a 30-year fixed rate mortgage was 3.11% at the end of 2021. The all-time record low national average is 2.65%, set on Thursday 1/07/2021 (source: Freddie Mac).
  1. OIL PRICES – The price of oil ended 2021 at $75.21 a barrel, up +55.0% from its 2020 close of $48.52 a barrel. Oil’s all-time closing high price is $147.27 a barrel as of 7/11/2008 (source: CME Group).
  1. OVERSPENDING – The national debt of the United States was $29.495 trillion as of the close of business on Thursday 12/30/2021, an increase of $1.75 trillion during calendar year 2021 (source: Treasury Department).

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Bill’s By The Number$

  1. REALLY LOW – Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. For the decade of the 2010s (1/01/2010 through 12/31/2019), inflation was up just +1.8% per year, the lowest decade of inflation in the USA since the 1930s.  By comparison, the decade of the 1970s (1/01/1970 through 12/31/1979) suffered +7.4% annual inflation (source: Department of Labor).  # 4, 1/18/21
  1. ACCURATE? – The government surveys 60,000 households each month in order to estimate our nation’s unemployment rate, i.e., 60,000 households out of a grand total of 125.8 million households. That means data collected from 1 out of every 2,097 households is the source of our jobless rate (source: Department of Labor).  # 10, 3/01/21
  1. CAREFUL WHAT YOU ASK FOR – The last major tax reform in the United States was signed into law by President Bill Clinton on 8/10/93. 15 months later in the 1994 midterm elections held on 11/08/94, the House flipped from a Democratic majority of 258-176 to a Republican majority of 230-204, while the Senate flipped from a Democratic majority of 57-43 to a Republican majority of 52-48 (source: Congress).  # 3, 4/12/21
  1. FEWER KIDS – The US recorded 3,605,201 births in 2020, the 6th consecutive year the total has declined, and the smallest number recorded nationally since 1979 (source: National Vital Statistics System). # 7, 5/10/21
  1. DID YOU NEED IT? – 40.3% of college graduates aged 22 to 27 are working in jobs in which they are “underemployed,” i.e., they are working in a job that typically does not require a college degree. Historically, 33.5% of college grads are “underemployed” (source: Federal Reserve Bank of New York).  # 13, 5/31/21
  1. STOCKS AND HIGH INFLATION – In the last 70 years (1951-2020), inflation as measured by the “Consumer Price Index” (CPI) was been at least +5% in 12 different years, most recently in 1990. The S&P 500 has been equally split over the 12 high-inflation years, advancing in 6 years and falling in 6 years (on a total return basis).  The average return for the S&P 500 over all 12 years is a gain of just +3.2% (total return) (source: BTN Research).  # 2, 6/21/21
  1. WEAR A MASK – Flu cases have dropped dramatically during the pandemic. The number of Americans testing positive for the flu during the 2020-2021 flu season was the lowest number recorded in 25 years (source: CDC).  # 4, 6/28/21
  1. AN AGING GROUP – 2 out of every 5 physicians (40%) in the USA today will be at least age 65 within the next 10 years (source: The Complexities of Physician Supply and Demand: Projections form 2019-2034). # 12, 7/12/21
  1. THEY HAD ENOUGH3.2 million Americans retired in 2020, a +56% increase over the average 2.05 million Americans who retired over the previous 8 years, i.e., 2012-2019 (source: Pew Research Center). # 5, 9/13/21
  1. PANDEMIC COST – The average cost of care for an individual infected with the COVID-19 virus who has insurance coverage and required hospitalization is $29,000. That average cost soars to $156,000 if the patient required a ventilator and needed treatment in an intensive care unit (source: FAIR Health).  # 13, 9/27/21
  1. WHEN WILL THEY SPEND IT? – An estimated $3.3 trillion of additional cash has been accumulated in bank accounts by American households since the beginning of the pandemic, i.e., cash that would have previously been spent (and not saved) if the pandemic had not occurred (source: Longview Economics). # 11, 10/18/21
  1. BONE DRY – California’s “Water Year 2021” (the 12 months from 10/01/20 to 9/30/21) was the 2nd driest year for statewide precipitation in its history. “Water Year 1924,” or 97 years earlier, was the driest year in California’s history (source: California Department of Water Resources).  # 11, 10/25/21
  1. UP AND DOWN – The nation’s personal savings rate, which soared during the early months of the pandemic, has now fallen back to its pre-pandemic levels. The savings rate was 7.5% in November 2019, rose to 33.8% in April 2020, and now has come back to 7.5% in September 2021 (source: Bureau of Economic Analysis).  # 6, 11/08/21
  1. FOR HIREJob openings in the USA have increased from 6.611 million as of 9/30/20 to 10.438 million as of 9/30/21, an increase of 3.827 million or 10,485 new job openings per day (source: BLS). # 12, 11/29/21
  1. WONDER WHY? – 27.1 million Americans moved in the last year, 8.4% of the US population. That’s the lowest percentage of Americans that reported living at a different residence in an annual survey conducted since 1948.  25 years ago (1996), 16.3% of Americans moved in the prior 12 months (source: Census Bureau).  # 8, 12/06/21

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Bill’s By The Number$

  1. TWENTY OR MORE – The S&P 500 is up +27.2% YTD (total return) through last Friday 12/10/21. The S&P 500 has returned at least +20% (total return) in 11 of the last 30 years (1991-2020).  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).
  1. ABOVE THEM ALL – A year ago (12/21/20), Barron’s published the year-end 2021 forecast for the S&P 500 made by 10 Wall Street strategists. The 10 predictions ranged from a low of 3800 to a high of 4400.  The index’s 12/31/20 actual close was 3756.  The S&P 500 closed last Friday 12/10/21 at 4712 (source: Barron’s).
  1. AT THE HIGH END – A year ago (12/21/20), Barron’s published the year-end 2021 forecast for the closing yield on the 10-year Treasury note made by 10 Wall Street strategists. The 10 predictions ranged from a low of 1.00% to a high of 1.50%.  The 10-year note’s actual yield close on 12/31/20 was 0.913%.  The yield on the 10-year Treasury note closed last Friday 12/10/21 at 1.487% (source: Barron’s).
  1. VERY LATE IN THE YEAR AGAIN – The all-time closing high for the S&P 500 of 4712 was set on 12/10/21. The S&P 500 has set its closing high for the calendar year during December in 13 of the last 19 years, i.e., 2003-2021, including December highs reached in 2019, 2020 and now 2021 (source: BTN Research).
  1. ONE-PER CENT – To rank in the top 1% of US taxpayers for the 2019 tax year required adjusted gross income (AGI) of at least $546,434. That highly paid group received 20.14% of all AGI that was reported nationwide but they paid 38.77% of the federal income tax that was collected (source: Internal Revenue Service).
  1. FIVE-PER CENT – To rank in the top 5% of US taxpayers for the 2019 tax year required adjusted gross income (AGI) of at least $221,572. This group received 35.93% of all AGI that was reported nationwide but they paid 59.44% of the federal income tax that was collected (source: IRS).
  1. TAXES – The top 3% of US taxpayers in tax year 2019 reported at least $291,384 of adjusted gross income (AGI) but paid 52.10% of all federal income tax. The 97% of taxpayers who reported less than $291,384 of AGI paid the remaining 47.90% of federal income tax that was collected in tax year 2019 (source: IRS).
  1. EVERYBODY IS PAYING LESS – The Tax Cuts and Jobs Act of 2017 was signed into law by President Trump on 12/22/17 and became effective 1/01/18, i.e., the tax cuts did not impact tax returns filed for tax year 2017. The average tax rate paid by the top 1% of taxpayers, i.e., federal income tax paid divided by adjusted gross income, dropped from 26.76% in 2017 to 25.57% in 2019.  The average tax rate paid by the bottom 90% of taxpayers dropped from 8.38% in 2017 to 7.36% in 2019 (source: IRS).
  1. IMPACTING MANY – 45% of American households surveyed in November 2021 indicate that rising domestic inflation has caused them “moderate” or “severe” hardship (source: Gallup).
  1. AS LONG AS I’M HERE – Just 1 out of every 11 employees (9%) who were auto-enrolled in their companies’ 401(k) plans opt out of their participation in the pre-tax retirement plan (source: Fidelity).
  1. HOME LOANSGovernment-backed mortgages, e.g., FHA or VA loans, make up 50% of all home mortgages. The maximum government-backed mortgage loan in 2022 in a majority of the US will be $647,200.  In high cost areas of the country, the maximum loan will be $970,800 (source: Federal Housing Finance Agency).
  1. MOSTLY OLDER FOLKS – As of 12/01/21, 75% of the COVID-19 deaths that have occurred in the United States since January 2020 were decedents at least age 65. Just 7% of the COVID-19 deaths were decedents less than 50 years old (source: Centers for Disease Control and Prevention).
  1. JUST DO YOUR JOB – Congress passed legislation on 12/01/21 that will avert a government shutdown until Friday 2/18/22. By that date, Congress must agree on discretionary spending amounts needed to complete 12 appropriation bills that are required for fiscal year 2022 spending, i.e., the 12 months from 10/01/21 to 9/30/22.  As of Friday 2/18/22, fiscal year 2022 will be 39% completed (source: Congress).
  1. THEY’RE IN EVERYTHING – 75% of the semiconductor chips manufactured in the world today are made in Asia. Just 12% of all chips are made in the USA (source: Semiconductor Industry Association).
  1. HELPING THE SMALL MARKET TEAMS – 48% of the local revenue of every MLB team, i.e., local TV contracts, ticket gate receipts, concessions and parking revenue, goes into a “revenue sharing pool” that is split equally among all 30 MLB teams (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. NOT A NORMAL YEAR – Over the last 12 months, i.e., 12/03/20 to last Friday 12/03/21, the S&P 500 has gained +25.6% (total return) and set 71 all-time closing highs. 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).
  1. ONE OPINIONJeremy Siegel, Professor of Finance at Wharton, predicted on 11/24/21 a target value of 5000 for the S&P 500 during 2022. The S&P 500 closed last Friday 12/03/21 at 4538 (source: Jeremy Siegel).
  1. HOW MUCH WE USE – The US consumed 18.2 million barrels of crude oil per day in 2020. The all-time consumption record in the US was 20.8 million barrels of crude oil per day in 2005 (source: Energy Info. Admin.).
  1. YOU WANT MY VOTE? – Senator Joe Manchin (D-WV), an important swing voter in the “Build Back Better” debate, called on President Biden on 11/23/21 to restore the Keystone XL pipeline. Biden revoked the permit for the pipeline on 1/20/21.  Manchin estimates the pipeline would provide the US with 900,000 barrels of crude oil per day from Canada (source: Senate Committee on Energy & Natural Resources).
  1. FED JOBS – With the resignation of Randal Quarles at the end of 2021 and the expiration of Richard Clarida’s term on 1/31/22, the Fed’s 7-member Board of Governors will have 3 vacancies. President Biden has pledged to “bring new perspectives and new voices” to the Fed board (source: Federal Reserve).
  1. STATES PAYING FOR MEDICAID27.2% of the total spending of the 50 US states in fiscal year 2021 was for Medicaid expenditures, a total of $722 billion (source: The National Association of State Budget Officers).
  1. WHO WILL GET THE WORK? – HR # 3684, the “Infrastructure Investment and Jobs Act” was signed into law by President Biden on 11/15/21. The bill contains $65 billion allocated to expand broadband assess throughout the country.  The agency tasked with the disbursal of the funding is taking 6 months (to 5/15/22) to develop its selection process, e.g., the broadband speeds and prices that internet service providers will be required to offer (source: National Telecommunications and Information Administration).
  1. WONDER WHY? – 27.1 million Americans moved in the last year, 8.4% of the US population. That’s the lowest percentage of Americans that reported living at a different residence in an annual survey conducted since 1948.  25 years ago (1996), 16.3% of Americans moved in the prior 12 months (source: Census Bureau).
  1. START SAVING NOW – A child born in 2021 that begins kindergarten in the fall of 2026 would attend college between the years of 2039 and 2043. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges that have occurred over the last 30 years (+4.9% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would be $229,635 or $57,409 per year (source: College Board).
  1. WAS PRIVATE, NOW PUBLIC – The cost of tuition, fees, room and board at an average public 4-year college for the current 2021-2022 school year is $22,690. The cost of tuition, fees, room and board at an average private 4-year college for the 2000-2001 school year, i.e., 21 years ago, was $22,240 (source: College Board).
  1. NOT ENOUGH STAFF – 4 out of 5 (80%) childcare centers nationwide reported having staffing shortages as of June 2021 (source: National Association for the Education of Young Children).
  1. EVERY DAY – An estimated 11,050 Americans will turn 65 years old each day next year (2022), i.e., 1 every 8 seconds. This group represents the 12th year of 19 years of “Baby Boomers” turning age 65.  An estimated 11,525 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).
  1. BACKSTOP – The Pension Benefit Guaranty Corporation (PBGC) took over 47 plans during fiscal year 2021, ensuring pension benefits to 34,000 current and future retirees of the 47 failed plans. The PBGC maximum guarantee is based on the age of the retiree and whether survivor benefits are selected, e.g., in 2022, the maximum monthly guarantee for a “straight-life” annuity for a 65-year old is $6,204.55 (source: PBGC).
  1. BOTTLENECK – 20% to 30% of the glass bottles used in the beer, wine and liquor industry in America are imported, primarily from China, Germany, Italy, France and Mexico (source: Glass Packaging Institute).
  1. BIG MONEY – The “Players Championship” for the men’s pro golf tour will conclude on Sunday 3/13/22 and will have the largest purse (at least $20 million) and the largest payout for the winner ($3.6 million) of any tournament on the men’s tour during the 2021-22 season, including the 4 majors (source: PGA).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. CONTINUITY AT THE FED – President Joe Biden nominated Jerome Powell on Monday 11/22/21 for a 2nd term as chair of the Federal Reserve. Powell, on the job since 2/05/18, has overseen the nation’s central bank during the pandemic, coordinating a series of stimulus programs that kept money flowing throughout our economy.  During his nearly 4-years as Fed chair, the S&P 500 has gone from 2649 to 4595, an annualized return of +16.4% (total return).  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).
  1. MORE OF BBB – Although described as containing $1.75 trillion of proposed spending over the next 10 years (2022-2031), the “Build Back Better” (BBB) bill (HR # 5376) actually involves $2.43 trillion of spending. The largest of BBB’s social policies includes $585 billion of “family benefits,” e.g., childcare, paid family leave and universal pre-K, and $570 billion for “climate and infrastructure” programs, e.g., electric vehicle tax credits and climate-related tax credits.  The Senate will debate BBB and is expected to make changes to the bill (source: BBB).
  1. WHO BENEFITS? – The House version of HR # 5376 (aka “Build Back Better” Act) that is now in the Senate raises the “state and local tax” (SALT) cap from $10,000 to $80,000. An estimated 70% of the tax benefit of the increase to $80,000 would be used by individuals in the top 5% of US taxpayers, i.e., taxpayers with annual incomes of $365,000 or more (source: Tax Policy Center).
  1. TAX STRATEGY – The House version of HR # 5376 (aka “Build Back Better” Act) contains a 5% surtax on income above $10 million and an 8% surtax on income above $25 million, a tax increase on individual taxpayers projected to raise $230 billion over the next 10 years. Some individuals may shift earnings that they currently receive through S-corporations to C-corporations to bring their personal income below the $10 million thresholdPlease consult a tax expert for details (source: BBB).
  1. NICE NEIGHBORHOOD – The costliest zip code in the USA is 94027 (Atherton, CA) where the median sales price of a single-family home in 2021 was $7.475 million (source: Architectural Digest).
  1. RISING DEMAND – The USA had a housing shortage of 3.8 million homes as of 12/31/20, i.e., 3.8 million homes are needed to meet the national demand for single-family homes (source: Freddie Mac).
  1. I.Y. – 70% of households with a net worth of at least $500,000 and headed by a person younger than 45 years old do not use or infrequently use a financial advisor for the selection of investments (source: Federal Reserve).
  1. KEEPING OUR BANKS SAFE – As of 10/01/21, the 5 largest US banks have “capital requirements” ranging from 7.0% to 11.2% of assets. The exact percentage for any individual bank is the sum of a 4.5% minimum capital requirement, a “stress test capital buffer requirement” of at least 2.5%, and a “surcharge for global systemically important banks” (source: Federal Reserve).
  1. NO CHOICE – 37% of 1,550 adults (at least age 18) surveyed in February 2021 are carrying “medical debt” after receiving healthcare that they did not have available funds to fully pay for (source: Statista).
  1. TARNISHED STATE – 52% of Californians surveyed in October 2021 view the state’s economic outlook over the next 12 months to be negative, expecting “bad times” ahead (source: Public Policy Institute of California).
  1. WOMEN – 2 of every 3 caregivers (67%) in the United States are women, caring for children, aging parents or other individuals with illnesses or disabilities (source: Center for Disease Control and Prevention).
  1. FOR HIREJob openings in the USA have increased from 6.611 million as of 9/30/20 to 10.438 million as of 9/30/21, an increase of 3.827 million or 10,485 new job openings per day (source: Bureau of Labor Statistics).
  1. MORE PLUGS – An estimated 4 million charging stations for electric vehicles will be needed nationwide by 2030, up from 45,500 existing charging stations today (source: International Council on Clean Transportation).
  1. HUGE, BUT SLOWING DOWN – Student loan debt nationwide was $1.58 trillion as of 9/30/21, but the total has increased just +1.9% over the last 12 months. Over the last 5 years, i.e., 9/30/16 to 9/30/21, student loan debt has increased +23.5% (from $1.279 trillion to $1.58 trillion), an average increase of +4.3% per year (source: Federal Reserve Bank of New York).
  1. A WORLD RECORD – Diane Friedman ran 100 meters in 36.71 seconds on 8/15/21 at the Michigan Senior Olympics, the fastest 100 meters ever run by a woman at least age 100 (source: GrowingBolder.com).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. WHEN THE FED LAST RAISED RATES – Between 12/14/16 and 12/19/18, the Fed raised short-term interest rates 8 times (0.25 percentage points each time). Between 12/14/16 and 12/19/18, the S&P 500 increased +15.8% (total return) in aggregate over the 2-years.  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).
  1. TWO OPINIONS – Morgan Stanley predicted on Monday 11/15/21 that the S&P 500 would fall to 4400 by 12/31/22, while the next day (11/16/21) Goldman Sachs forecasted that the S&P 500 would rise to 5100 by 12/31/22. The S&P 500 closed last week (Friday 11/19/21) at 4698 (source: Morgan Stanley, Goldman Sachs).
  1. USE TIME TO YOUR ADVANTAGE – $522 invested at the beginning of every month for 40 years earning 6% per year will accumulate to $1 million. $1,021 invested at the beginning of every month for 30 years earning 6% per year will accumulate to $1 million.  The calculations ignore the impact of taxes and are for illustrative purposes only and are not intended to reflect any specific investment alternative (source: BTN Research).
  1. TAXES – HR # 5376, aka “The Build Back Better Act,” is estimated to raise taxes on the top 1% of US taxpayers and lower taxes on the other 99% of taxpayers. The top 1% of taxpayers, approximately 1.4 million tax returns, would see an average annual federal tax increase of $54,360 (source: Tax Policy Center).
  1. THE HIGHEST RATE TO PAY – The highest individual marginal tax rate in 2022 (37% under current law) comes into play for single taxpayers at $539,000 of taxable income and at $647,850 of taxable income for married filing jointly taxpayers (source: IRS).
  1. AT LEAST A FEW DAYS AT HOME – 25% of 2,050 full-time workers surveyed in September 2021 say they would quit their job if their employer completely eliminated the “work-from-home” option in a post-pandemic world (source: 2021 State of Remote Work).
  1. DIFFERENT PIECES OF THE PIE – The “Consumer Price Index” (CPI) increase of +6.2% on a year-over-year basis as of 10/31/21 included a “food” increase of +5.3%, a “gasoline” increase of +49.6%, an “electricity” increase of +6.5%, a “used cars and trucks” increase of +26.4%, and a “medical care services” increase of just +1.7% (source: Bureau of Labor Statistics).
  1. HAVE TO MOVE QUICKLY – For the 12 months ending 6/30/21, US homes for sale were on the market for a median period of just 7 days before going under contract. That’s the shortest period recorded nationwide in data that has been tracked since 1989 or more than 3 decades (source: National Association of Realtors).
  1. WHAT CHOICE DID THEY HAVE? – 63% (i.e., 5 out of every 8) of home buyers in the United States and Canada during calendar year 2020 made at least 1 offer to buy a home based only on a “virtual” tour of the home, i.e., they never step foot in the home before making that offer (source: New York Times).
  1. THAT’S NOT NORMAL – The average home in the United States has appreciated +23.4% in the 17 months from 3/31/20 (as the pandemic was beginning) to 8/31/21. For the 8 “Mountain” states tracked (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico), the average price increase over the 17 months has been +30.9% (source: Federal Housing Finance Agency).
  1. QUESTION THE STATUS QUO – 71% of 1,025 high school teenagers (ages 14-18) surveyed in May 2020 were “likely to pursue” a 4-year college degree. Just 48% of 1,052 high school teenagers surveyed in September 2021 were “likely to pursue” a 4-year college degree.  Many teenagers want to “forge their own educational path” and are seeking information on other post high school career options (source: ECMC Group).
  1. JUST AN AVERAGE CAR – The average new car purchased in the United States in September 2021 cost $45,031, an all-time record price and up +12.1% from $40,159 as of September 2020 (source: Kelley Blue Book).
  1. SLOW MOVINGShips carrying containers traveling from China to the United States travel at a speed of 16-18 mph (source: Freightos).
  1. SUPPLY CHAIN – The average product purchased by an American consumer today has internal components that are manufactured in 10 different countries (source: Jeremy Nixon, CEO of Ocean Network Express).
  1. COLLEGE FOOTBALL – The Cincinnati Bearcats football team was ranked # 3 by AP as of 11/15/21. Cincinnati has finished a season in the AP’s top 10 poll just twice (2009 and 2020) in its history (source: AP).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. FIRST YEAR IN OFFICE – The first calendar year of the 8-years that Barack Obama was president (2009) produced a S&P 500 gain of +26.5% (total return). The first calendar year of the 4-years that Donald Trump was president (2017) produced a S&P 500 gain of +21.8% (total return).  The first calendar year of the Joe Biden presidency has produced a S&P 500 gain of +26.2% YTD (total return) with 7 weeks to go in the year.  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).
  1. WIND AT THEIR BACK – Every US president since 1993 – Clinton, Bush, Obama, Trump and Biden – began his first year in the White House with total control of Congress, i.e., Presidents Clinton, Obama and Biden began with Democrats controlling both the House and the Senate, and Presidents Bush and Trump began with Republicans controlling both the House and the Senate (source: Congress).
  1. BOND BULL RUN – Just over 40 years ago (9/30/1981), the yield on the 10-year US Treasury note closed at an all-time peak of 15.84%. The yield on the 10-year Treasury note closed on 11/12/21 at 1.583%.  The all-time low closing yield on the 10-year Treasury note was 0.501% set on 3/09/20 (source: Treasury Department).
  1. NOT AS LONG AS YOU WOULD THINK – The “weighted average maturity” (WAM) of Treasury debt issued by the US government was 64.6 months (about 5 ½ years) as of 12/31/2020, up slightly from its historical average of 60.2 months (5 years) based on bills, notes and bonds in force since 1980 (source: Treasury Department).
  1. “TAKE-UP” RATE – 68% of American workers in the private sector worked for employers that provided retirement benefits as of 3/31/21. 51% of the 68% who had access to a plan elected to participate in their company’s retirement plan (e.g., 401(k) plan), i.e., 75% of private sector workers who had an option to participate elected to do so (source: Bureau of Labor Statistics).
  1. SAVING FOR RETIREMENT – The 401(k) individual pre-tax contribution limit will be $20,500 in 2022, up from $17,000 in 2012 or 10 years earlier. If the same inflation adjustments that have occurred over the last 10 years repeat over the next decade, the 401(k) individual pre-tax contribution limit will be $24,721 in 2032 (source: IRS).
  1. GOT YOUR BACK JACK – Employers paid on average 73% of the annual cost of family coverage for health insurance in 2021, a non-taxable economic benefit for the employee (source: Kaiser Family Foundation).
  1. AMERICAN DREAM – As of the end of the 3rd quarter (9/30/2021), total US mortgage debt was $10.99 trillion, 72% of the $15.24 trillion of total household debt (source: Federal Reserve Bank of New York).
  1. WHAT HAS CHANGED?20,331 homes have been repossessed by lenders nationwide YTD through 10/31/21. That’s down from 50,238 homes repossessed for all of 2020, 143,955 homes in 2019, 230,305 homes in 2018 and 291,579 homes in 2017 (source: Attom Data Solutions).
  1. POTUSPresident Joe Biden turns 79 years old on 11/20/2021. Biden will be just 15 days short of 82 years old if he runs for reelection on 11/05/2024 for a 2nd term in the White House (source: BTN Research).
  1. TIMELINE – HR # 3684, the “Infrastructure Investment and Jobs Act,” was passed by the Senate on 8/10/21, passed by the House on 11/05/21 and is to be signed by President Biden on 11/15/21 (source: Congress).
  1. GOING UP – Inflation, as measured by the Consumer Price Index, advanced +6.22% on a year-over-year basis as of the end of October 2021. That’s the greatest trailing 1-year inflation recorded in the United States since prices were up +6.27% as of November 1990 or nearly 31 years ago (source: Bureau of Labor Statistics).
  1. ONE BIG REASON – The price of imported industrial supplies and materials coming into the US has increased +28% from just prior to the pandemic through 7/31/21. Industrial supplies and materials include paper, building materials, and metals used in other durable goods.  All these items are key components in the US supply chain, impacting the price of thousands of finished products in our economy (source: Federal Reserve Bank of NY).
  1. NOT BABIES ANYMORE – “Baby Boomers” are the 78 million Americans born between 1946-1964, i.e., the last of the “boomers” will turn 65 years old in 2029. By 2030, an estimated 9.5% of the US civilian labor force will be individuals at least age 65 years old, up from 6.6% today (source: Bureau of Labor Statistics).
  1. HOT AT THE RIGHT TIME – The Atlanta Braves, winners of 88 games during the 2021 regular season, beat the Milwaukee Brewers (winners of 95 games), the Los Angeles Dodgers (winners of 106 games) and the Houston Astros (winners of 95 games) on their way to winning the 2021 World Series (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.