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
- Let’s Not Make it Two: The S&P 500 has had only 1 down year (2008) in the last 15 years (2003-2017). YTD through 10/17/18, the S&P 500 is up +5.07%. (Source: Yahoo! Finance)
- Waffle House Index (Update): Due to Hurricane Michael, Waffle House was forced to close 30 restaurants (22 in Florida, and eight in Georgia). Waffle House often feeds first responders and is a leading indicator of just how badly an area is recovering following a natural disaster. (Source: USA Today)
- Safe(r) Haven?: In only 3 of the last 40 years (1978-2017), the US bond market has posted negative performance. Through 10/12/18, the Bloomberg Barclays US Aggregate Bond Index is down -2.1% YTD. (Source: Bloomberg Barclays)
- Land of the Setting Sun: China’s economy ($12 trillion) is now more than twice the size of Japan’s ($5 trillion) after being smaller ($4.5 trillion to $4.8 trillion) just 10 years ago. (Source: Financial Times)
- Flu Season: This past winter’s flu season saw 900,000 people hospitalized (the highest hospitalization rate in modern history) and 80,000 flu-related deaths, a record number dwarfing the previous annual record of 56,000 deaths from the 1976-1977 season. (Sources: CDC, Gizmodo)
- What’s Your Plan?: Women are 5 times more likely to become widowed than men. 53% of widows lament that they and their deceased husbands had no financial plan in place in the event that either spouse died. (Source: Merrill Lynch, Age Wage)
- Empire City: The USA has 10 cities with a population of at least 1 million, with the largest being New York City (9 million). China has 102 cities with a population of at least 1 million. The largest (Shanghai) has a population of 22 million. (Source: US Census Bureau, The Guardian)
Thought for the Month
“Elections belong to the people. It’s their decision. If they decide to turn their back on the fire and burn their behinds, then they will just have to sit on the blisters.”
– Abraham Lincoln, 16th President of the United States (1809-1865)
Commentary – “The Future Factory”
As seen on CBS’ “60 Minutes” (watch the 13-minute video HERE), MIT’s Media Lab, dubbed “The Future Factory”, develops technology that shapes our future. Founded in 1984, the laboratory has developed some of today’s ubiquitous technology including touch screens, automated driving instructions, wearable technology, and electronic ink. Today, the 50 graduate students admitted out of 1,300 applicants are developing tomorrow’s technology including surfing the internet with your mind, pacemaker batteries recharged by heartbeat, retinal eye exams by phone, synthetic limbs, climate-controlled mini-farms, utilizing the power of dreams to increase creativity, and so many more. Their unique partnership with companies to fund the program while being focused on interesting ideas rather than solely on the bottom line makes us excited to see what they conjure up next.
Chart for the Month – Volatility 101
While market volatility in 2018 may feel higher than usual, it has actually been closer to a return to “normal” after a record-setting low volatility year in 2017. Despite the recent market moves of +/- 1% per day, we are still not on pace to experience an “average” year of 62 trading days during the year.
Visual Capitalist provides this helpful “Volatility 101” overview to refamiliarize yourself with this normal, healthy part of a functioning market that many have forgotten existed after the markets have been abnormally calm these last few years.