Economic and Investment News Bits
- Just 56% of eligible Americans voted in the 2012 presidential election. For younger Americans aged 18-24 only 38% of them voted. 70% of Americans aged 65 or older voted. If this occurs in 2016, consider how it might affect the outcome. (Source: Census Bureau)
- U.S. retirement account assets reached a record $24.5 trillion as of 6/30/2016, up 76% from the 2008 total. It is no wonder some in Washington want to limit contributions to these pre-tax assets.
- Purchasing a home for $1 million or more in Canada requires a minimum down payment of 20%. (Source: Canadian Imperial Bank of Commerce)
- The New York Yankees had the highest opening day team payroll ($223 million) for the just-concluded 2016 season out of 30 teams. The Cleveland Indians had the 27th highest payroll ($74 million) during the season. The Indians made the playoffs while the Yankees are sitting at home counting their money.
- “We think timing is right for investors to examine the positives for emerging market stocks: reasonable valuations compared to fully-priced U.S. stocks, better expected economic growth than developed markets, and the start of positive emerging market fund flows,” (Source: Goldman Sachs).
- Israel and Jordan finalized a natural gas deal recently, after working on the $10 billion energy agreement for many years. Even though half of Jordan’s population is of Palenstnian origin, peace with Israel is a critical component of Jordan’s foreign policy. It helps Amman remain friendly with Israel’s allies: the U.S. and Europe. Most Jordanian citizens recognize the natural gas deal’s benefits to the country’s economy.
- In case you needed more reasons to have a diversified investment mix, the top-performing asset classes through October 14 are precious metals, energy, emerging market stocks, utilities, medical equipment, and dollar-based emerging market bonds. Note that last year’s top-performing, S&P 500 technology sleeve is not in the mix.
Thought for the week
“There is nothing on this earth more to be prized than true friendship.”
Thomas Aquinas, Italian theologian (1225-1274)
Market Insights: The Election and Investors
Trump or Clinton? Does it matter to markets? Polls may be giving Clinton an edge, but most are within the margin of error, and Trump could certainly make another Brexit moment. Natixis Global Asset Management asks “How much weight should investors put on the U.S. presidential election? Is it time to adjust portfolios?” It is important to remember that proposed differences pre-election are always bigger than reality post-election. Divided government, if we continue that route, ensures that presidents get only a small portion of what they want. If Brexit taught us one thing, it’s that betting on the conventional wisdom can be dead wrong. With too many variables still unknown, including the election winner, the make-up of Congress, or how proposals will morph into policy, long-term market implications are uncertain. Says Natixis: “Neither candidate has presented a convincing pro-growth policy that would boost economic activity or the markets. While long-run implications are uncertain, we still believe that Mr. Trump’s newcomer status and lack of policy history would make him the source of more short-term volatility. But a large swing to a Democratic majority in Washington could cause even greater market distress.” In short, it is a guessing game at best.
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