The Markets
In 2006, Time Magazine’s Person of the Year was ‘You.’
The magazine declared that 2006 was about:
“…Community and collaboration on a scale
never seen before… It's about the many wresting power from the few and helping
one another for nothing and how that will not only change the world, but also
change the way the world changes.”
Last
week, J.P. Morgan named EVERYONE the winner of the "Most Promotional
Retailer Award." While communities across America are very interested in Black
Friday sales, these events are less about empowerment and more about brawling
for consumer goods. It’s a popular activity. In fact, a case could be built
that one of the newest Thanksgiving holiday traditions involves the telling of riveting
Black Friday (and now Thanksgiving Day) tales that describe retail shopping
bravado and adventure.
It may prove to be
a short-lived tradition if mobile devices and online sales continue to gain
popularity. According to IBM Digital Analytics
Benchmark, which collects data from roughly 800 U.S. retail sites in real time,
as cited in Barron’s, online sales were up 20 percent on Thanksgiving Day this
year as compared to last year. They slowed a bit on Black Friday, up just 9
percent relative to last year by mid-afternoon. Many of the folks who chose to
forego shopping in stores made their purchases using mobile devices which
accounted for 37 percent of online sales on Friday.
Holiday
shoppers and retailers aren’t the only ones who appreciate robust holiday sales,
so do state governments. Ron Alt, senior research associate at the Federation
of Tax Administrators, was cited by USA
Today as saying “about 10 percent of annual state sales taxes come in to
state coffers in January from holiday season sales, topping most other months
in which about 7 or 8 percent of the taxes are collected.”
We hope
your Thanksgiving holiday was filled with wonderful people and adventures.
Data as of 11/29/13
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard
& Poor's 500 (Domestic Stocks)
|
0.1%
|
26.6%
|
27.5%
|
15.0%
|
17.2%
|
5.4%
|
|
10-year
Treasury Note (Yield Only)
|
2.8
|
NA
|
1.6
|
2.8
|
2.7
|
4.4
|
|
Gold
(per ounce)
|
0.5
|
-26.0
|
-27.4
|
-2.6
|
9.0
|
12.1
|
|
DJ-UBS
Commodity Index
|
0.3
|
-10.7
|
-13.5
|
-5.4
|
1.0
|
-0.4
|
|
DJ
Equity All REIT TR Index
|
-0.8
|
2.1
|
6.2
|
10.9
|
25.4
|
8.9
|
Notes: S&P
500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold
does not pay a dividend) and the three-, five-, and 10-year returns are
annualized; the DJ Equity All REIT TR Index does include reinvested dividends
and the three-, five-, and 10-year returns are annualized; and the 10-year
Treasury Note is simply the yield at the close of the day on each of the
historical time periods.
Sources:
Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance
is no guarantee of future results. Indices are unmanaged and cannot be invested
into directly. N/A means not applicable.
Pensions around
the world… Here’s something a lot of people are thankful for:
pensions. There are public pensions, which generally are funded by tax dollars,
and private pensions, which generally are funded by companies.
Merriam-Webster.com defines pension as, “an amount of money that a company or
the government pays to a person who is old or sick and no longer works.” The Economist takes a slightly different
view although its focus was on public pensions:
“A pension is a
claim on the earnings of future workers. Some countries choose to pay these
claims out of future taxes; others set up special funds to invest in financial
assets. But these assets (equities, bonds and property) will be able to pay
pensions only because future workers generate the income to make them valuable.”
In the late 2000s,
tax-financed pensions made up almost 60 percent of gross income on average for
people age 65 and older who lived in the 34 countries that comprise the Organization
for Economic Co-operation and Development (OECD). Europeans were the most
dependent on their governments. Older Belgians and Finns, on average, received
about 80 percent of gross income from the state. Older Chileans, Americans, and
Canadians were the least reliant. Chileans over age 65 received less than 10
percent of gross income from the government. For Americans and Canadians,
government pensions made up about 40 percent of income on average.
In general, public
and private pension funds have done pretty well in 2013. They were helped by rising
stock prices and higher bond yields. However, the challenges they face, including
increasing longevity and volatile markets, are relatively daunting. That’s one
reason private pensions have been disappearing in United States. The number of
employer-sponsored defined benefit pension plans reached an all-time low of about
22,700 single-employer plans in early 2013. That’s down from just over 112,000
in 1985.
Weekly Focus – Think
About It
“When you rise in the morning,
give thanks for the light, for your life, for your strength. Give thanks for
your food and for the joy of living. If you see no reason to give thanks, the
fault lies in yourself.”
--Tecumseh, Native American leader of the
Shawnee
Value
vs. Growth Investing (11/29/12)
|
0.17
|
29.71
|
2.83
|
11.12
|
31.19
|
17.81
|
18.53
|
|
|
0.15
|
28.61
|
3.04
|
11.16
|
29.43
|
17.76
|
16.92
|
|
|
-0.15
|
32.56
|
2.90
|
10.63
|
33.96
|
19.64
|
17.75
|
|
|
1.08
|
28.40
|
2.99
|
13.66
|
27.36
|
17.72
|
20.14
|
|
|
-0.54
|
25.39
|
3.24
|
9.11
|
27.64
|
15.97
|
13.07
|
|
|
-0.04
|
31.94
|
1.94
|
10.45
|
35.05
|
17.76
|
22.70
|
|
|
-0.07
|
28.71
|
1.27
|
11.06
|
31.09
|
18.48
|
23.80
|
|
|
0.08
|
29.12
|
2.16
|
8.66
|
31.92
|
15.44
|
22.02
|
|
|
-0.13
|
38.20
|
2.37
|
11.70
|
42.37
|
19.30
|
22.15
|
|
|
0.95
|
34.86
|
3.33
|
12.63
|
39.02
|
18.08
|
23.27
|
|
|
1.13
|
33.77
|
3.57
|
13.26
|
38.03
|
17.00
|
22.86
|
|
|
0.88
|
39.06
|
3.05
|
12.41
|
43.31
|
19.08
|
23.90
|
|
|
0.83
|
31.91
|
3.39
|
12.31
|
35.86
|
18.18
|
23.00
|
|
|
-0.04
|
31.80
|
2.61
|
10.90
|
33.60
|
19.25
|
19.29
|
|
|
0.86
|
29.19
|
2.83
|
12.52
|
29.21
|
17.38
|
20.82
|
|
|
-0.36
|
28.41
|
3.07
|
9.88
|
31.14
|
16.80
|
15.54
|
©2004 Morningstar, Inc. All Rights Reserved.
The information contained herein: (1) is proprietary to Morningstar; (2) is not
warranted to be accurate, complete or timely. Morningstar is not responsible for
any damages or losses arising from any use of this information and has not
granted its consent to be considered or deemed an “expert” under the Securities
Act of 1933. Past performance is no guarantee of future results. Indices are unmanaged and while these indices
can be invested in directly, this is neither a recommendation nor an offer to
purchase. This can only be done by
prospectus and should be on the recommendation of a licensed professional.
Office Notes:
Emergency Fund Tips
Ben Franklin once
declared: “A penny saved is a penny earned.” Equally enlightening are his
thoughts on expenses: “Beware of little expenses. A small leak will sink a
great ship.”
And there are
plenty of “leaks” that can scuttle an already-tight budget. For instance, a spouse
idled by the sour economy, a fender bender with the family car, or an
unexpected hospitalization. That’s why financial advisors recommend that you
have a rainy-day fund—enough liquid assets to cover three to six months’ worth
of emergency living expenses. In case of financial emergency, access to
additional money will save you from relying on credit cards or loans that
simply compound the problem.
When starting an
emergency fund, here are a few tips to consider:
1. Determine what
amount is best for you. Most experts agree that you should keep between three
and six months’ worth of your living expenses set aside in your emergency fund.
Your specific situation—whether you have children, carry substantial debt, and
types of insurance coverage you have—will determine what amount is best for
you. Examine your situation, your income, and your needs to decide how much you
should save.
2. Start small.
Starting an emergency fund can be as simple as depositing $100 into your
high-interest savings account. But before you begin, be sure that you’re
meeting your basic living expenses. And, as you build your emergency fund, be
sure you’re also reducing your spending and avoiding debt.
3. Stick to a
schedule.
Get into the habit of making regular deposits. Whether it is weekly, bi-weekly,
or monthly, create a schedule and stick to it. Once you make saving automatic,
you won’t even have to think about it.
I hope you have a
fund for emergency situations. If so, this advice may not apply to you, but you
may have a loved one or someone you know who is struggling and could benefit
from these tips.
Regards,
,
Michael L. Schwartz, RFC®, CWS®, CFS
P.S. Please feel
free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list,
please reply to this email with their email address and we will ask for their
permission to be added.
Michael
L. Schwartz, RFC®, CWS®, CFS, offers securities and advisory services
through Independent Financial Group, LLC., A Registered Broker/Dealer,
Member FINRA-SIPC.
This
information is provided for informational purposes only and is not a
solicitation or recommendation that any particular investor should purchase or
sell any security. The information contained herein is obtained from sources
believed to be reliable but its accuracy or completeness is not
guaranteed. Any opinions expressed
herein are subject to change without notice.
An Index is a composite of securities that provides a performance
benchmark. Returns are presented for
illustrative purposes only and are not intended to project the performance of
any specific investment. Indexes are
unmanaged, do not incur management fees, costs and expenses and cannot be
invested in directly. Past
performance is not a guarantee of
future results.
* The Standard &
Poor's 500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock market in general.
* The DJ Global ex US
is an unmanaged group of non-U.S. securities designed to reflect the
performance of the global equity securities that have readily available
prices.
* The 10-year Treasury
Note represents debt owed by the United States Treasury to the public. Since
the U.S. Government is seen as a risk-free borrower, investors use the 10-year
Treasury Note as a benchmark for the long-term bond market.
* Gold represents the
London afternoon gold price fix as reported by the London Bullion Market
Association.
* The DJ Commodity
Index is designed to be a highly liquid and diversified benchmark for the
commodity futures market. The Index is composed of futures contracts on 19
physical commodities and was launched on July 14, 1998.
* The DJ Equity All
REIT TR Index measures the total return performance of the equity subcategory
of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the
source for any reference to the performance of an index between two specific
periods.
* Opinions expressed
are subject to change without notice and are not intended as investment advice
or to predict future performance.
* Past performance does
not guarantee future results.
* You cannot invest
directly in an index.
* Consult your
financial professional before making any investment decision.
* To unsubscribe from
our “market commentary” please reply to this
e-mail with “Unsubscribe” in the
subject line, or write us at “mike@schwartzfinancial.com”.
