Tuesday, June 13, 2017

Vanguard: How America Saves 2017 (based on 2016 DC plan data)

Please read Vanguard's How America Saves 2017: Vanguard 2016 defined contribution plan data published June 1, 2017. Here are a few quotes from the report:

"Defined contribution (DC) retirement plans are the centerpiece of the private-sector retirement system in the United States. More than 94 million Americans are covered by DC plan accounts, with assets now in excess of $7 trillion. Vanguard is among the leaders in the DC marketplace with more than $1 trillion in DC assets under management as of March 31, 2017."

"Participant contributions to equities were unchanged in 2016 at 74%. In 2016, nearly half (49%) of all new contributions to these plans were directed to target-date funds."

Friday, June 2, 2017

June 2017 Market Update - Will Seasonality Tip this Market?

Is this market feeling euphoric yet? The S&P 500 was up 1.16% in May. I'm not feeling a collective sense of euphoria, are you? This makes me inclined to think the top of this cycle may happen in the next few years. This market is certainly more expensive than a few years ago and leaves the market vulnerable to any shocks to the global economy. Let's examine price, sentiment, and valuation as we start the month of June.

Thursday, May 25, 2017

Federal Reserve Board's 4th Annual Survey of Household Economics and Decisionmaking

Report on the Economic Well-Being of U.S. Households in 2016, this survey and report were prepared by the Consumer and Community Development Research Section of the Federal Reserve Board’s Division of Consumer and Community Affairs (DCCA).

In order to monitor the economic status of American consumers, the Federal Reserve Board conducted the fourth annual Survey of Household Economics and Decisionmaking in October 2016. This survey provides insights into the well-being of U.S. households and consumers, and provides important information about how individuals and their families are faring in the economy. Topics examined in the survey include individuals’ overall financial well- being, employment experiences, income and savings behaviors, economic preparedness, access to banking and credit, housing and living arrangement deci- sions, education and human capital, student loans, and retirement planning.

Thursday, May 18, 2017

Retirement Data: Fidelity Plan Balances Q1 2017 and Who Contributes to IRAs?

Fidelity has updated their data on balances in retirement accounts. Balances hit another record at the end of the first quarter of 2017. They highlight some interesting data on the overlap of HSA's (Health Savings Accounts) and retirement plan contributions. Please read the press release to learn more about their conclusions from the latest update.

 
 Source: Fidelity Retirement Savings Analysis

In April 2017, Anqi Chen and Alicia H. Munnell at Boston Center for Retirement Research published a report titled: Who Contributes to Individual Retirement Accounts? They conclude:

Examine Your Entire Financial Life

Many investors do well at pieces of their overall financial plan, however the value of a qualified planner is they help individuals evaluate their entire financial life. Here are two resources that may help broaden the scope of what you consider when planning your financial life:

Saturday, May 6, 2017

27th Annual Retirement Confidence Survey - Employee Benefits Research Institute

"The 27th wave of the Retirement Confidence Survey (RCS), the longest-running survey of its kind in the nation, finds that the share of American workers who are very confident in their ability to afford a comfortable retirement remains low, and some workers report that preparing for retirement is emotionally or mentally stressful. However, among retirees, confidence in their ability to afford a comfortable retirement continues to be comparably high." Quoted from brief by Lisa Greenwald, Greenwald & Associates; and Craig Copeland, Ph.D., and Jack VanDerhei, Ph.D., Employee Benefit Research Institute.

Thursday, May 4, 2017

May 2017 Market Update

The Standard & Poor's 500 gained 0.91% in April. This was the strongest April since 2013 when the S&P 500 returned 1.81%. Let's start this monthly update with a bit of a history lesson. The Dow Jones Industrial Average was created in 1896. This was a price weighted index created to help followers of the market see a quick number to determine how the market was performing. Approximately sixty years after the Dow Jones Industrial Average, in 1957, a better barometer of the market was born: the market cap weighted S&P 500 index (which expanded on the S&P Composite Index). However, the first index fund still took almost twenty years from the birth of the S&P 500 index. The Vanguard index fund, VFINX, started in 1976. On the 40th anniversary for the Vanguard index fund, Bloomberg reported on it's rocky start with only $11.3 million of assets. Over the last 40 years index funds, modern portfolio theory (MPT), and the addition of ETFs, exchange traded funds, have transformed investing. Now that our history lesson is over, let's review price, sentiment, and valuation as we start May.