Welcome to Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others.
Economic and Investment News Bits
- Celebrate Good Times: On March 9, 2018, the bull market in U.S. stocks celebrated its ninth anniversary, achieving +398% gains and 202 all-time closing highs during that period. The index has had 5 separate “corrections” of at least 10% but less than 20% during this period. For comparison, the index’s 9 ½ year bull run from October 1990 to March 2000 had 308 record closing highs. (Source: Reuters)
- Don’t Fear the Bear: The S&P 500 has gained +10.1% per year (total return) over the last 50 years (1968-2017) despite suffering through 7 bear markets of at least a 20% decline each time. (Source: Robert Shiller)
- 20x in 30 years: $5,000 invested in the S&P 500 in 1988 would be worth nearly $100,000 today, 30 years later. (Source: First Trust)
- From the “Land of Lincoln” to “The Green Mountain State”: For every 2 families that moved into Vermont in 2017, just 1 family moved out, making Vermont the “top moving destination”. For every 1 family that moved into Illinois in 2017, 2 families moved out, placing Illinois last on the same list. (Source: United Van Lines)
- Here In My Car: The average new auto loan hit a record $31,099 with record high average monthly payments of $515 spread over 69 months. The average used auto loan rose to a record $19,589 with record high monthly payments of $371 spread over 64 months. In 2017, the average price paid for a new vehicle was $35,176 (a 10% annual increase over the last 5 years, mainly attributed to many drivers buying more expensive trucks and SUVs). (Sources: CNBC, Experian, Edmunds)
Thought for the Month
“Remember to look up at the stars and not down at your feet. Try to make sense of what you see and wonder about what makes the universe exist. Be curious. And however difficult life may seem, there is always something you can do and succeed at.”
Stephen Hawking, English theoretical physicist, cosmologist, and author (1942-2018)
Commentary
Dubbed “The Robin Hood Index”, Bloomberg examined how many days the governments of 49 countries could keep running if each of their respective richest citizen paid for it. Cyprus’s richest person could keep his government running the longest at 441 days. By comparison, Jeff Bezos of Amazon, the richest man in the world, even with his $99 Billion in wealth, would only help the U.S. government for 5 days. Their exercise finds that, of the 49 countries analyzed, nearly all would spend through the single richest citizen’s assets within 100 days, with most succumbing in less than a month.
Chart for the Month
This chart from Visual Capitalist shows the most valuable U.S. companies over the last 100 years. In 1917 (“The Industrialist Era”), the list was overshadowed by U.S. Steel (over 3x larger than the runner-up, AT&T) and includes numerous other manufacturing and industrial companies producing steel, rubber, foods, and heavy equipment. By 1967 (“The Hardware Era”), IBM was on top with AT&T maintaining second place. Oil companies captured three of the top 10 spots with two film companies (remember those?), Eastman Kodak and Polaroid making the list. By 2017 (“The Platform Era”), tech giants Apple, Alphabet (Google), Microsoft, Amazon, and Facebook take the top five spots. Only one oil company remains on the list, and the two largest financial institutions round out the top 10.
The staggering increase in the value of companies (the chart is even adjusted for inflation) shows how much corporate America has grown since the world’s first billion dollar company, U.S. Steel, in 1901. We find it interesting to view these snapshots in time to see how much corporate wealth has grown exponentially yet continues to be derived from consumer consumption.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter, will be suitable for your individual situation, or prove successful. This material is distributed by PDS Planning, Inc. and is for information purposes only. Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice. PDS Planning assumes no liability for the interpretation or use of this report. Consultation with a qualified investment advisor is recommended prior to executing any investment strategy. No portion of this publication should be construed as legal or accounting advice. If you are a client of PDS Planning, please remember to contact PDS Planning, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives. All rights reserved.