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
- “Black Friday”? How about “Black 2017”?: The S&P 500 index has spent the entire year in positive territory. Since 1943, there have only been 10 prior years where the S&P went the entire year without posting a negative return at any point (most recently, 2012 and 2013). Performance for the following year (i.e. 2018 if this holds up) has been positive in 9 of the 10 occurrences with an average gain of +12.5%. (Source: Bespoke Investment Group).
- Challenges for Traditional Retail Stores: Organized retail crime costs retailers an average of $726,351 per every $1 billion in sales. An estimated 11% of returns are fraudulent. (Source: National Retail Federation)
- Context is Everything: Total U.S. household debt is at a new record high…but debts relative to assets are much lower today (13.7%) than before the Great Recession following the Financial Crisis (19.4%), and are, in fact, at one of the lowest levels in decades. (Source: The Street)
- Getting Back to Work: The United States had 6 unemployed Americans per job opening in July 2009 (the peak of this statistic during the most recent recession). As of the most recent report (October 2017), there are only 1.1 unemployed Americans per job opening. (Source: Bureau of Labor Statistics)
- Quality Control (or a lack therof): The number of vehicle recalls has increased every year since 2011, totaling a record 53.2 million vehicles in 2016 compared to 13.6 million vehicles in 2011. Despite not costing the vehicle owner to do so, approximately 30% of all recalled vehicles have not been repaired. You can check your vehicle(s) to see if there are any open recalls at safercar.gov by using the Vehicle Identification Number (VIN) (easily found on your title, insurance paperwork, or on your vehicle). (Source: USA Today).
- Trifecta: The U.S. economy grew at 3%+ for the third straight quarter, the first time it has done so since early 2005. (Source: Bloomberg)
Thought for the Month (as we approach Black Friday)
“Whoever said that money can’t buy happiness simply didn’t know where to go shopping.”
Bo Derek (1956-present), American Film Actress
Next Gen Personal Finance (NGPF) is a non-profit with the goal of bringing “effective and engaging financial education to all U.S. high school classrooms”. Their research report on the state of financial education shows we have a long way to go in teaching future generations how to manage their money. Only 1 out of 6 students nationwide are required to take a personal finance course to graduate from high school. Millennials are saddled with record high student debt loads that many regret taking on. 70% of Millennials are stressed and anxious about saving for retirement (so maybe they’re not that much different than those of us in older generations). You can view their report at ngpf.org.
Chart for the Month
This month’s chart, again from Visual Capitalist, shows what a $1,000 investment in each of these companies would be worth today had you invested during the pre-crisis highs a decade ago in October 2007. If you had enough resolve to hold onto your investment and not panic when it felt like the world was ending in 2008-2009, you would have made a profit in all but one of these stocks (GE). While we can’t predict where any particular investment or markets generally will be on a short-term basis, this chart is a helpful reminder of the power of patience and staying invested over time.
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.