Economic and Investment News Bits
- “With consumer spending accounting for roughly 70% of economic growth, it’s always about the consumer. The data are promising. Continuing job growth, accelerating wages and low inflation have real income expectations rising for the first time in 20 years,” (Source: Linda Duessel).
- “We believe China will remain on course, with GDP growth decelerating moderately toward the 6%+ mark, while the economy shifts toward consumption, services and higher value-added manufacturing. This will help provide stability to commodity prices over the next few years. We will see more trade with developed economies that produce finished and industrial goods, and less trade with commodity producers. In short, China’s economy is not at risk of collapsing,” (Source: Michael Hasenstab).
- Economist John Maynard Keynes predicted in 1930 (86 years ago) that by the year 2000 Americans may choose to work as little as 15 hours a week because the bulk of their material needs would have been satisfied and life of leisure would take precedence. (Source: The Guardian)
- The 1989 movie Back to the Future Part II predicted by 2015 we would have personal drones, mobile payment technology, hands-free gaming consoles, video phones, and hoverboards. (Source: Money)
- “The Fed should put any further Fed Funds rate increase on a long-term hold and might consider taking back December’s increase. There will be a healthy debate among Fed board members about the wisdom of a further increase,” (Source: Jeremy Siegel)
- From USAA Funds: “We expect a continuation of slow economic growth, low inflation, and interest rates that will stay low for some time. Opportunities exist in dividend-paying, undervalued companies. We are favorable on non-U.S. developed economies based on relative valuations, especially Europe.”
- Thinking of relocating? If your current income is $50,000 in Columbus, you would need $53,000 to have a similar life style in Atlanta and Austin; $54,000 in Phoenix; $60,000 in Hilton Head and Denver; $80,000 in Seattle and Boston; $98,000 in San Francisco; $117,000 in Manhattan.
Thought for the week
“I never said most of the things I said.”
Yogi Berra, American athlete (1925-2015)
Chart for January (CLICK TO ENLARGE)
The S&P 500 did not have a stellar year with the -0.7% return in 2015, however it performed significantly better than most asset classes. This Goldman Sachs chart shows the relative performance of the main asset classes over the last 15 years. The S&P 500 has actually outperformed practically everything for the past three years. This has caused diversified portfolio to lag over this time period. As we all know, this will not last forever, and the length of outperformance has been unprecedented and is poised to revert.
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.