By The Numbers - February 2019
Source: Direxion Funds
February 15, 2019
- YEAR THREE IN THE WHITE HOUSE - This year (2019) is the 3rd year of Donald Trump’s 1st 4-year presidential term. The S&P 500 has been positive on a total return basis during 21 of the last 23 “presidential 3rd-years,” i.e., 3rd-years dating back to 1927, including the last 19 in-a-row. The average performance for the S&P 500 during the last 23 “presidential 3rd-years” has been a gain of +16.1% (total return) (source: BTN Research).
- WE NEED MORE PEOPLE - As of 7/01/18, the population of the USA had grown +0.62% on a year-over-year basis, the lowest annual growth rate recorded by our country since 1937. Over the most recent 12 months analyzed, our population grew by +2.0 million people, the combination of 3.86 million births, 2.81 million deaths and 979,000 immigrants who became US citizens (source: Census Bureau).
- SUPER SENIORS - The number of Americans at least age 75 is projected to double over the next 20 years, rising from 23 million in 2020 to 45 million in 2040 (source: Census Bureau).
- THEY FORGOT TO PLAN - 62% of the 43 million Americans on Social Security receive at least 50% of their retirement income via their monthly Social Security benefit (source: Social Security Administration).
- HOW IT’S SPENT - 63% of the $3.5 trillion that Americans spend annually on health care is for hospital care (33% of the $3.5 trillion or $1.1 trillion), physician and clinical services (20% of the $3.5 trillion or $694 billion) and prescription drugs (10% of the $3.5 trillion or $333 billion) (source: Centers for Medicare & Medicaid Svcs.).
- INVEST FOR THREE-YEARS - Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 91 separate 3-years beginning 1926-28, then 1927-29, . . . 2016-18) have produced a positive return. 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).
- WANTED: MORE BABIES - The “total fertility rate” (TFR) of US women in 2017, defined as the expected number of lifetime births per 1,000 women given current birth rates, was 1,765.5, the lowest number reported since 1978 (1,760.0). A TFR of 2,100.0 is considered the level for a population to replace itself (source: CDC).
- NOT EVEN FIVE PERCENT - The US population was 328 million as of 1/15/19, 4.4% of the world’s population (7.55 billion) as of that date, i.e., only 1 out of every 23 humans is an American (source: Census Bureau).
- SOME DON’T PAY ANYTHING - 50.2 million of the 150.3 million tax returns filed in tax year 2016 (the latest year tax data is available), legally did not pay any federal income tax, i.e., 33% of all returns paid nothing. The remaining 100.1 million tax returns paid $1.45 trillion of federal income tax (source: Internal Revenue Service).
- DIDN’T MAKE ANYTHING - Although 33% of the 150.3 million tax returns filed in tax year 2016 did not pay any federal income tax, the average adjusted gross income of these “zero payers” was only $12,900 (source: IRS).
- TRAVEL COSTS - Renting a 20-foot truck to move from Phoenix to Chicago this month costs $1,196, 53% of the $2,258 it costs to rent the same 20-foot truck to move from Chicago to Phoenix. Illinois was the # 2 “moving out of” state in 2018 while Arizona was the # 5 “moving to” state in 2018 (source: United Van Lines).
- DEAD WRONG - In the 12/31/17 issue of USA Today, writer Adam Shell wrote of “18 stocks to Consider for 2018: All of the 18 names are seen rising +25% or more, according to analysts.” Instead 17 of the 18 stocks lost money in 2018, and an equal investment in all 18 stocks fell 26.1% for the year (source: BTN Research).
- OTHER PEOPLE’S MONEY - 59% of 1,001 registered voters surveyed in early January 2019 support the idea of raising the top individual marginal tax rate from 37% to 70% (source: Hill-HarrisX poll).
- CRAZY HIGH - For the 13 consecutive years from 1951-1963, the top individual marginal tax rate was at least 91%. The top individual marginal tax rate for 2019 is 37% (source: Internal Revenue Service).
- EXTREME POVERTY - 45% of the world’s population (3.4 billion out of 7.5 billion) survive on less than $5.50 a day (source: World Bank).
- ESTATE TAXES - An estimated 2.8 million Americans died in 2018. Of the 2.8 million deaths, an estimated 4,000 of those deceased individuals (i.e., 1 in every 700 deaths) died with an estate worth more $11.2 million, the maximum dollar amount that can be passed estate tax-free per decedent with proper tax planning (source: Tax Policy Center).
- ONE ESPRESSO PLEASE - 27% of 1,000 Millennials surveyed in July 2018 spend more money on coffee each month than what they set aside and invest monthly for their eventual retirement (source: Lendedu.com).
- HISTORICAL PERSPECTIVE - Since 1950, there have been 60 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, 1952-61, . . . 2009-2018). The S&P 500 index produced an average annual total return of less than +7% during 15 of the 60 decade-long periods (25% of the time). 19 of the 60 periods (32% of the time) resulted in an average annual total return of at least +14%. 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).
- JUST A ROTTEN DAY - On the day that Janet Yellen was sworn in as Fed Chair (2/03/14), the S&P 500 was down 2.3% (total return), the worst trading day for the index in 2014. On the day that Jerome Powell was sworn in as Fed Chair (2/05/18), the S&P 500 was down 4.1% (total return), the worst trading day for the index in 2018 (source: BTN Research).
- MORE THAN HALF - 53% of American taxpayers reported less than $40,000 of adjusted gross income for tax year 2016 (source: Internal Revenue Service).
- NOT STOPPING - 48% of working Americans surveyed in 2018 anticipate working past age 65, up from just 16% of workers who felt that way 30 years earlier (source: Employee Benefit Research Institute).
- GOOD FOR HOME BUYERS - The average interest rate nationwide on a 30-year fixed rate mortgage was 4.41% last week, down from 4.94% as of 11/15/18 or just 3 months ago (source: Freddie Mac).
- SITTING PRETTY - 40% of American homeowners own their home free and clear of any debt, i.e., no outstanding mortgage or existing home equity loan. Of the 60% of homeowners with debt, the median outstanding balance is $126,000 (source: Census Bureau).