Markets "In a Nutshell" for February 13, 2018Feb 13, 2018
Investment Week at a Glance
Stocks slid last week. The Dow Jones Industrial average, the S&P 500 and the New York Stock Exchange Composite (2,000 stocks) all fell by 5.2%. The “average investor’s index” (Value Line index) was down 4.6%. Foreign stocks (DJ Global ex U.S.) dropped 6.5% and bond prices (Barclays Aggregate Bond index) gained in value last week as the 10 year Treasury yield ended at 2.83%.(Data sources: Barron’s Financial, Wall Street Journal)
Further meltdown or a move up?
Ben Levisohn of Barron’s (who called further drops in stocks last week) writes that the stock correction we are in has been strange in that the drop was caused by fears of too much economic growth (normally growth means bigger profits and optimism on stocks). Levisohn also says that history suggests that this correction isn’t the end of the bull market. Another Barron’s writer (Vito Racanelli) agrees quoting a number of stock analysts such as deVere Group’s Tom Elliott who sees stronger economic growth and higher inflation as good for equities. Jim McDonald, chief investment strategists from Northern Trust, says the mini meltdown will help extend the bull market.
Is age 70 the new retirement age?
According to personal finance guru Suze Orman, 70 is the new retirement age. Orman points out that Americans are living longer, meaning your retirement savings need to last longer. New research from the Stanford Center on Longevity suggests that the typical American would benefit from a later retirement age, too. Read on…
70 the new retirement age part II
After analyzing 292 different retirement income strategies, the research team identified the best way for most people to withdraw their money in retirement. They call it the "spend safely in retirement" strategy, and a key component of it is delaying Social Security payments until age 70, which could mean working longer. According to the Stanford report, "The best way for an older worker to implement the Spend Safely in Retirement Strategy is to work just enough to pay for living expenses until age 70 in order to enable delaying Social Security benefits. In essence, 'Age 70 is the new 65.' We have seen support in this from our clients who seem to be working in some capacity later and later.
Stocks (the S&P 500) entered into correction territory (a drop of 10% from its January 26th high) on Friday. This marked the first time since early 2016 we had a correction. When was the last time stocks experienced a bear market (more than 20% drop)? a. 2002 b. 2009 c. 2010 d. 2011...Answer is below…
Have a good week!
Answer to quiz:
b. March of 2009 marked the end of the last bear market and the start of the current bull.