September 2018 Market Update - Global "Decoupling" Continues

The S&P 500 increased 3.03% in August. A strong showing for the S&P following a 3.6% advance in July. Certainly this represents a prosperous start to the second half of 2018 as the S&P 500 touches new record highs. While domestic markets have been accelerating to the upside, foreign stocks have struggled. YTD Vanguard FTSE All-World ex-US Index Fund ETF Shares, VEU, declined -3.42% and have dropped in value 5 out of the first 8 months of 2018. Emerging markets, as represented by ETF EEM, reported a decline of -3.77% in August with YTD returns, as of the end of August, dropping -7.78%. Without further adieu let's review price, sentiment and valuation as we start September.

Retirement Data: Fidelity Plan Balances Q2 2018

Please click on the above chart to enlarge. From Fidelity's press release:

• Average individual 401(k), 403(b) and IRA account balances bounce back from dip in Q1, show solid year-over-year growth. The average 401(k) balance increased to $104,000, just under the all-time high balance of $104,300 from Q4 2017. The average balance represents a one percent increase from last quarter and a six percent increase from one year ago. The average IRA balance increased to $106,900, almost a two percent increase from last quarter and almost a seven percent increase from Q2 2017. The average 403(b) account was $83,400, almost a two percent increase from Q1 2017 and a five percent increase year-over-year.

August 2018 Market Update - Keep Perspective

This market update will not follow our normal format due to my travel schedule in August. I will have price, sentiment, and valuation updates again with the September market update. Instead this update will focus on the top 5 articles I've read in July to help us keep perspective as we transition into the second half of the year. If you want to read a review of July's market and a review of what could present itself this August read Ryan Vlastelica's MarketWatch article: After a Strong July, August looks Ominous for Stocks.

Retirement Data: 18th Annual Transamerica Retirement Survey

Transamerica Center for Retirement Studies (TRCS) published their 18th annual survey results at the end of June. Here are some highlights quoted from their press release and their research:

• American workers’ total household retirement savings have grown to $71,000 (estimated median) in 2017, up from $53,000 in 2013. Baby Boomer workers, the generation that is currently entering retirement, have saved $164,000 (estimated median) in all household retirement accounts, up from $103,000 in 2013.

July 2018 Market Update - Foreign Shares Lose Ground

The S&P 500 was up 0.48% in June. After falling 1.18% in Q1 of 2018 the S&P 500 increased 2.88% in Q2 2018. YTD through the end of June the S&P 500 is up 1.67%. The YTD gains are thanks to a rally in only two sectors: technology and consumer discretionary. Moreover, Amazon.com, a component of the consumer discretionary sector, has accounted for 34.6% of all the S&P 500 gains for the first six months of the year. Amazon.com has increased over 45% since the start of the year. Foreign investing continued to sour during June with the Vanguard FTSE All-World ex-US Index ETF, VEU, down 2.14%. VEU(price) enters July with negative YTD returns, measuring -3.88%. It's time to review price, sentiment and valuation as we start July.

Retirement Data: Vanguard How America Saves

In June, Vanguard released their report How America Saves 2018. Highlights from the report include:

• "In 2017, the average account balance for Vanguard participants was $103,866; the median balance was $26,331. In 2017, Vanguard participants’ average account balances rose by 8% compared with 2016 and median account balances rose by 7%. Two factors are driving the changes in participant account balances. The first is a changing business mix—new plans converting to Vanguard recently have had lower account balances. The second is the rising adoption of automatic enrollment, which results in more individuals saving, but also a growing number of smaller balances." 

June 2018 Market Update

The S&P 500 was up 2.16% in May. YTD through the end of May the S&P 500 is up 1.18%. A couple markets to highlight before we review price, sentiment and valuation. First, technology stocks continue to significantly outperform the market with an incredibly strong performance in May. The Technology Select SPDR ETF, XLK, is up 9.65% YTD through the end of May.  Moreover, the Invesco S&P 500 Equal Weight Technology ETF, RYT,  is up 11.13% YTD.  On the flip side, foreign investing soured during the month with the Vanguard FTSE All-World ex-US Index ETF, VEU, down 1.99%. VEU enters June with slightly negative returns for 2018. Now let's review price, sentiment and valuation as we start June.