Welcome to our June 2024 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.

By Drew Potosky, CFP®,
Posted: 6/21/2024


Benchmarking is defined as evaluating or checking something by comparison with a standard. When we think about investments, the benchmark is usually (right or wrong) the S&P 500 index. The trick to benchmarking is picking the right one. Investors with a lower risk tolerance with investments mostly in bonds and cash would likely be confused comparing the performance of their portfolios to the performance of the S&P 500. The same way an investor solely holding international stocks wouldn’t be wise to benchmark against the S&P 500. With the right comparison selected, we can better manage our expectations.  I was catching up with a friend recently and he brought this up with interest rates. The idea is that, since interest rates were at or near 0% since mid-2009, 0% is the benchmark many are using now. Thinking that rates will eventually be cut from the current 5.25% down to 0% again. Bringing with it the idea that mortgages could move back down to the 3%’s and car loans to the same territory. But 0% may be the wrong benchmark. The average Fed Funds rate since 1955 is 4.61%, while the Fed has stated their long-run projection is 2.80%. Perhaps expectations for mortgage rates and bond price growth need to be tempered when a more realistic benchmark is used.

NVDA Market Cap Climb

What a few years it has been for Nvidia. The semiconductor stock has been in the right place at the right time and produced good products to take advantage of the push towards internet-of-everything (chips) and the recent AI push (more chips). As of market close yesterday, 6/20, NVDA sits as the second largest public stock just ahead of Apple and behind only Microsoft. In October 2022, Nvidia had a market cap of $280 billion. In less than two years, the parabolic returns have catapulted the value of the company up to $3.2 trillion, with a T. It’s one good day, or one bad day for Microsoft, away from being number 1.

Reading is Fun!

What’s better or more relaxing than sitting by the pool, the beach, on your porch or deck, the couch, with a great book? I’m sure we can come up with a list, but reading can be a great time. In case you missed it, earlier this month we posted a list of What We Are Reading at PDS. One could argue that some recommendations are better than others (mine rock), but a good book can be found anywhere and everywhere! Have you read anything good lately? We’d love to know!


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