Tuesday, October 17, 2017

Retirement Data: Boston College Center for Retirement Research IRA/401k Analysis

The Center for Retirement Research at Boston College is out with a new report titled 401(K)/IRA Holdings In 2016: An Update From The Federal Reserve’s 2016 Survey of Consumer Finances (SCF) by Alicia H. Munnell and Anqi Chen.

The overall report shows some encouraging trends, however it's disturbing to read the extent of the challenges younger and lower paid workers have accessing defined contribution plans and saving for retirement. The report highlights that the financial services industry working with municipal, state and federal governments need to create more options so fewer working age adults miss out on saving for retirement. Below are two graphics from the report that stood out to me. The first one shows how little the median household has saved for retirement. The second one shows the disparity between high income folks and low income folks nearing retirement. Notice the median household has $780,000 in the top quintile by income compared to $26,700 for the lowest quintile by income.

Thursday, October 5, 2017

Understanding Wealth in America

Please read Nine Charts about Wealth in America published by the Urban Institute that was updated October 5, 2017. One finding to note:
"Focusing on private income, such as earnings and dividends, plus cash government benefits, we see that the income of families near the top increased roughly 90 percent from 1963 to 2016, while the income of families at the bottom increased less than 10 percent."
The authors and designers did an amazing job creating interactive graphics, which will be more engaging on a computer or larger screen.

Sunday, October 1, 2017

October 2017 Market Update

The S&P 500 was up 1.93% in September. The S&P 500 went another month without a 3% or 5% correction. According to LPL Research's Weekly Commentary released on September 25, the S&P 500 has gone more than 10 months without a 3% correction, the second longest period in the history of the S&P 500. Additionally, they noted, it has been 15 months since the last 5% dip, due to the Brexit referendum in June 2016. Only three times in history was there a longer stretch without a 5% correction. Let's review price, sentiment, and valuation as we start October.

Thursday, September 28, 2017

Which Economies Grow Millionaires?

The number of millionaires in the world rose by nearly 8 percent in 2016 to an all-time high of around 16.5 million people, with record total wealth of $63.5 trillion, according to the World Wealth Report 2017 by Capgemini, a global consultancy firm. They call this report the "industry’s leading benchmark for tracking high net worth individuals (HNWIs), their wealth, and the global and economic conditions that drive change in the Wealth Management industry." The report shows millionaires continue to grow across the three largest geographies: North America, Europe, and Asia-Pacific. The wealth of high net worth individuals (HNWI) -- which Capgemini defines as individuals with investable assets of $1 million or more, excluding the primary residence, collectibles and consumables -- rose 8.2 percent on the year in 2016 and is on track to surpass $100 trillion by 2025 from $63.5 trillion in 2016 (amounts in US dollars).




The report breaks out the number of high net worth individuals (HNWIs) by country as follows:

Source: World Wealth Report (click on graph to enlarge)

Tuesday, September 5, 2017

September 2017 Market Update: Risk Spike Ahead

The S&P 500 was up 0.05% in August. When we examine global securities via the Morgan Stanley Capital International All Country World Index (MSCI ACWI, iShares ETF ACWI), which represents 85% of the global investable equity market, it has been up 10 months in a row. The question on most investors' minds is whether or not the strength of stocks can continue. With that background, let's review price, sentiment and valuation as we start September.

Tuesday, August 8, 2017

Retirement Data: Fidelity Plan Balances Q2 2017

Source: Fidelity Press Release Aug 3, 2017

From the Fidelity release: "The average 401(k) account balance triples for long-term savers. People in their 401(k) for 10 years straight saw their balance increase to a record average of $266,100, up from $78,800 in Q2 2007.

Friday, August 4, 2017

August 2017 Market Update - Bull Trade Hits New Highs

The S&P 500 July index added 1.93% (2.06% with dividends) in July, and posted a double-digit gain of 10.34% YTD (11.59% with dividends). The S&P 500 returned 13.65% gain for the one-year period (with a 16.04% total return with dividends). From the U.S. election on Nov. 8, 2016, the index was up 15.46% and up 17.15% with dividends. It was a month of new closing highs, the S&P 500 posted five new closing highs in July. All 11 sectors gained for the month, up from five last month and seven in May. Large cap stocks continued to outperform mid and small cap stocks in 2017. Let's review price, sentiment, and valuation as we start the month of August.