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
- GE Kicked Out of Dow: Once the world’s most valuable company and the last original Dow member (1896), GE is being replaced by Walgreen’s in the Dow Jones Industrial Average index. Down 26% year-to-date, GE is the worst performer in the Dow in 2018 (as it was in 2017 also). (Source: Bloomberg)
- Amazon Ineligible for Dow: Because the Dow is price-weighted (a remnant of stocks previously splitting when they approached $100/share), Amazon is unable to join the index due to its $1,700/share price which would distort the index. That’s roughly 46 times the price of Pfizer, the cheapest stock in the 30-stock index. (Source: CNN Money)
- Student Loan Debt Doubled: Increasing from $690 billion as of 9/30/09 to $1.38 billion as of 12/31/17, student loan debt has doubled in just 8 years. (Source: Federal Reserve Bank of New York)
- Netflix worth more than Disney and Comcast: In yet another sign that cord-cutting and streaming media is becoming more popular compared to traditional over-the-air TV watching, Netflix is worth $175 billion, which is more than Disney or Comcast. (Source: CNN Money)
- Trading Partners Up North: The U.S. exported more goods to Canada in 2017 ($282.4 billion) than the combined amount that was exported to China ($130.4 billion), Japan ($67.7 billion), and the United Kingdom ($56.3 billion). (Source: Commerce Department)
- Concentration of Wealth: Just 2.2% of banks and savings institutions in the U.S. hold 83% of the deposits maintained in FDIC-insured institutions. There are a total of 5,670 banks and savings institutions holding $17.4 trillion of deposits as of the end of 2017. (Source: FDIC)
Thought for the Month
“Worry does not empty tomorrow of its sorrow, it empties today of its strength.”
Commentary – Top Wine Destinations
According to a study of ratings on CellarTracker to identify where the best-reviewed bottles of wine originated, the top destination for wine this year is Coshocton, Ohio. Coshocton has nine wineries and vineyards that boast an average wine rating of 98 out of 100, including the most highly rated winery in the country: Heritage Vineyards. A humorous commenter described their vintages as being “made from the fermented tears of Browns and Indians fans and matured in empty trophy cases”.
Chart for the Month – The One Investment Truth That Never Changes
As legendary investor and Warren Buffet’s mentor Benjamin Graham said, “The investor’s chief problem, and even his worst enemy, is likely to be himself.” The one investment truth that never changes is that people are their own worst enemies when it comes to investing.
As explored in the field of behavioral finance, human nature and our emotionally-driven decisions cause us to routinely make irrational choices. While everyone understands the basic tenet of investing is “buy low, sell high”, having the intestinal fortitude to adhere to your long-term strategy is often difficult in practice. Recognizing this fallibility and striving to overcome it is paramount, not only for your sanity, but to be a successful long-term investor.
While important to be aware of them, we urge you to avoid acting solely based upon your emotions when investing, as you (hopefully) restrain yourself from behaving in all other pursuits (we’re looking at you, road-ragers).
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. Investment conclusions and strategies suggested in this report may not be suitable for all investors and consultation with a qualified investment advisor is recommended prior to executing any investment strategy. All rights reserved.