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Markets “In a Nutshell” for February 18, 2020

Investment Week at a Glance

Stocks were up last week. The Dow Jones Industrial average gained 1.0% while the S&P 500 was up 1.6%. The New York Stock Exchange Composite (2,000 stocks) rose 1.2%. The “average investor’s index” (Value Line index) was up 1.6%. Foreign stocks (EAFE index) were up 0.2%. Bond yields stayed steady (bond prices flat) as the 10-year Treasury ended at 1.58%. (Data sources: Barron’s Financial, Wall Street Journal)

Uncle Sam Wants You!   (To Buy More Stocks)

CNBC reports that as part of a proposed new economic stimulus program, the Trump Administration is considering ways to incentivize Americans to invest more in the stock market. One scenario would make portions of income tax free if invested in the stock market. Another scenario has the establishment of a universal savings account which would allow for capital gains from stock investments to be tax free. President Trump has been strong stock market advocate, citing stock market strength as evidence of the success of his policies. Such vested interest in the stock market from the Executive Office could have unknown long-term consequences but for now can certainly push equities higher.

Is Wealth Not a Dollar Amount?

An article in AARP magazine questions whether trying to pick an amount of money to have at retirement is the best way to define wealth. The “better way” outlined is to figure out how much income (i.e. monthly, annually) you think you need at retirement and how it fits in to your estimated total amount saved. We agree. The way we put together our Financial Freedom Plans starts with “the number” or the estimated income (i.e. monthly, annually) you think you need. All else (total amount saved, rates of return) can be calculated from there.

30-Year U.S. Treasury Bond Hits Record Low Yield

Interest rates on new long-term bonds hit an all-time low last Thursday. The U.S. Treasury sold $19 billion of 30-year bonds at yield of 2.06%. Since Federal Reserve Chairman Jay Powell made his famous “Powell Pivot” (when the Fed abruptly went from raising to cutting interest rates after the 4th quarter 2018 stock drop), interest rates have been on decline. Lower rates have been a boon for stocks and bond prices.


What percent of this year’s gains in the S&P 500 have been driven by Microsoft, Amazon, Google, Apple and Intel?

  1. a. 10%
  2. b. 22%
  3. c. 39%
  4. d. 55%


Answer is below.




Have a Great Week!











Answer to quiz:

         4.   55%