September 2022Please reach out via phone or by replying to this email if you have questions, concerns, or to schedule an appointment. FACT: The S&P 500 gained +9.2% (total return) in July 2022 but remains down 12.6% YTD (total return). July’s performance was the stock index’s best monthly result since November 2020. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research). FACT: The S&P 500 is a cap-weighted index, i.e., the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation. As of the end of July 2022, the 42 largest stocks in the index carry the same weight as the other 462 stocks in the index. Note there are 504 stocks in the S&P 500 today because 4 different stocks each have 2 share classes (source: S&P). FACT: On Friday (8/05/2022) was the 11th anniversary of the day S&P downgraded the USA on 8/05/2011 of the top-rating that America had held for 70 years. The yield on the 10-year T-note was 2.57% on 8/05/2011. The yield on the 10-year T-note closed at 2.64% on Friday 7/29/2022 (source: Treasury Department). SELF TEST:Are you continuing to monitor your investments in this ever-changing financial world that we live in?FACT: Over the decade from 7/01/2011 to 6/30/2021, US export prices (i.e., all commodities including agricultural products) rose just +4.6% (in total, not per year). Over the 1-year from 7/01/2021 to 6/30/2022, US export prices rose +18.2% (source: Bureau of Labor Statistics). FACT: 40% of the world’s imports and exports are invoiced in US dollars (source: Patterns in Invoicing Currency in Global Trade).
FACT: The cost of shipping a 40-foot container from China to the west coast of the USA has gone from $2,500 (June 2020) to $20,000 (September 2021) to $9,500 (June 2022) (source: Freightos). SELF TEST:Have you accounted for the impact of economic changes in your retirement and investment plans?FACT: The Fed raised short-term rates by 0.75 percentage points Wednesday 7/27/2022, its 4th rate hike since 3/16/2022, making it a total of 2.25 percentage point increases this year (source: Federal Reserve). FACT: Between 2/04/1994 and 2/01/1995, the Fed raised interest rates 7 times. 4 of the 7 rate hikes were at least 0.50 percentage points, a total increase of 3 percentage points for all 7 rate hikes. That took the Fed’s target short-term rate from 3.0% to 6.0%. From the close of trading on 2/04/1994 to the close of trading on 2/01/1995, the S&P 500 gained +3.0% (total return) over the 1-year (source: BTN Research). SELF TEST:Is your financial portfolio prepared for the unknown future?FACT: 91% of the 128 million households in the USA own at least 1 car, SUV or light-duty truck, a total of 250 million vehicles. Surprisingly, electric cars and trucks make up just 2 million of the 250 million vehicles in our country today (source: Census Bureau).
FACT: California had 563,070 electric vehicles (EV) registered as of 2021 or 39% of the US total. No other state had as many as 100,000 registered EVs (source: National Renewable Energy Laboratory). |
