Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, October 28, the S&P 500 closed @ 1285, and that was...
  
    +3.2% ABOVE its 12-Month moving average which stood @ 1245.
    +0.9% ABOVE its 40-Week moving average which stood @ 1274.
    +8.1% ABOVE its 10-Week moving average which stood @ 1189.


Therefore, the INTERMEDIATE-Term trend IS BULLISH and the LONG-Term trend is Neutral to Moderately BULLISH.

What Lump Sum Will Provide Real Income of $100,000 Per Year for 30 Years?

A present value (PV) amount of $1.96 million in a pre-tax retirement account is required today to fund a future payment stream of 30 years of $100,000 annually (with a +2.5% cost of living / inflation increase for maintenance of purchasing power) assuming that a +6% rate of return (ROR) can be maintained into the future.

If the ROR falls to +5%, the PV amount rises +13% to $2.21 million.  If the ROR rises to +7%, the PV falls -11% to $1.75 million.

These calculations do not account for the payment of federal income taxes which would be due as a result of withdrawals from any pre-tax retirement funds.

Source: BTN Research

Amid Retirement Worries, Owners Of Annuities And Long-Term Care Insurance Are Most Confident

Confidence among U.S. workers in their retirement prospects plummeted -18.2% this year to a four-year low.

One in five working Americans now say they do not plan to retire at all, according to a survey by Sun Life Financial.

Retirement confidence levels had remained level for the past three years as measured by Sun Life’s Unretirement Index, a survey of nearly 1,500 workers. On a scale of 1 to 100, the index fell from 44 in September 2010 to 36 in September 2011.

All five subject areas covered by the poll fell this year, including employee benefits (-31.7%), the economy (-25.0%), government benefits (-21.6%), personal finances (-13.9%), and personal health (-13.2%).

Only 23% of working Americans feel very confident that they will meet basic living expenses in retirement, a huge drop from 42% last year.

Confidence in the future of Social Security fell to just 9%, continuing a steady plunge from 22% in 2008. Confidence about receiving adequate Medicare benefits has fallen to 8% from 20% in 2008.

The respondents who felt most confident about their retirement are those who expect to receive guaranteed lifetime income from annuities by age 67, or who own long-term care insurance products.

Wes Thompson, president of Sun Life Financial U.S., said in a written statement, “We believe the higher confidence of respondents across all wealth levels who own either variable annuities or long-term care insurance vehicles provides a positive wake-up call: Americans can take action to help secure their future and feel more secure about their golden years.”

Average Assets of IRA and 401(k) Owners (by Net Worth)...

National Debt from 1940 to 2011...

Are we headed in the right direction?

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, October 21, the S&P 500 closed @ 1238, and that was...
  
    -0.1% BELOW its 12-Month moving average which stood @ 1236.
    -2.8% BELOW its 40-Week moving average which stood @ 1274.
    +5.6% ABOVE its 10-Week moving average which stood @ 1173.


Therefore, the INTERMEDIATE-Term trend IS NEUTRAL to Moderately BULLISH and the LONG-Term trend is BEARISH.

Percentage of Retirees Holding Mortgage Debt At Alltime Highs...

The Misery Index: The Worst in 28 Years...

To put the current Misery Index (unemployment plus inflation = 12.9) in some historical context:

(1) it's higher than any time in the past 28 years

 (2) it's +36% higher than the post-World War II average of 9.5 


(3) there have been only 9 years in the past 63 when the annual Misery Index topped 12.9 — all in the inflationary 1970s.

The 1970s was the last time stagflation reared its ugly head.

Rampant government spending, regulatory hyperactivity and endless federal meddling in the economy were the root causes.


Sound familiar?

Household Debt Is A Drag (On The Economy)...

While no single element of the economy is a magic elixir that will propel growth, there is one glaring area that continues to affect overall economic growth: Household Debt.

One of the main aftershocks of the weak economic recovery has been the indebted fiscal condition of U.S. households.

From 1952 to 1979, the average ratio of household debt to gross disposable income was 57%, but over the past three decades the averages steadily, and then dramatically, climbed higher.

In the 1980s, it averaged 69%; in the 1990s it averaged 84%; but then the housing boom hit in the 2000s and the ratio skyrocketed to an average of 112%.

The ratio ultimately peaked in Q3 2007 at 127%, right before the onset of the recession.

While the household-debt-to-disposable-income ratio has come down to 113%, there is still a way to go to reach the lower levels of the 1980s or 1990s. Given the level of gross disposable income at the end of Q1, overall household debt would need to fall another -$3.4 trillion to match the average debt-to-disposable-income ratio of 84% from the 1990s.

It will be a long slog to get household debt back to more sustainable levels—a process made all the more difficult and painful by the slow growth in personal income.

As long as household debt levels remain high, deflationary pressures will likely remain a headwind to consumer spending, and thus to economic growth.

Chart of the Day: The Shale Gas Revolution in PA Has Helped the U.S. Become No. 1 in the World!

The chart above is from the Energy Information Administration and illustrates graphically the significant increases in natural gas production in recent years from increased drilling activity in the Marcellus Shale region of Pennsylvania.  

In only about a 3-year period, natural gas production in the northeast United States has tripled from 1.5 billion cubic feet per day in July 2008 to more than 4.5 billion cubic feet per day by July 2011, with almost all of the increase coming from new drilling in Pennsylvania.
 
The shale gas revolution in Pennsylvania has been responsible for America going from the 9th largest producer in the world ten years ago to the No. 1 producer in the world starting last year.  


  

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, October 14, the S&P 500 closed @ 1225, and that was...
  
    -0.9% BELOW its 12-Month moving average which stood @ 1236.
    -4.0% BELOW its 40-Week moving average which stood @ 1275.
    +4.9% ABOVE its 10-Week moving average which stood @ 1167.


Therefore, the INTERMEDIATE-Term trend IS NEUTRAL to Moderately BULLISH and the LONG-Term trend is BEARISH.

Health Insurance Premiums Soar +9.5% Under ObamaCare...

Cartoon of The Day: Protesting Corporate Greed?

Fastest Growing Segment In The U.S. Is The Age 65+ Group

The forecasted fastest-growing segment of the adult U.S. population by far from 2010 to 2020 will be the 65+ category, which is expected to grow by +36%.

This is due to the continuing maturation of the Baby Boom Generation, which swells the ranks of every age category it progressively hits.

Because of this large and growing 65+ population, much of the investment market is retirement driven, creating massive pools of retirement-directed capital in the financial markets.

-39% Purchasing Power Destruction Over The Past 20 Years...

An individual living on a fixed income over the 20 years from the end of 1990 to the end of 2010 would have suffered a -39% loss of purchasing power over the 2 decades using the CPI as a gauge of inflation

Source: U.S. Department of Labor

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, October 7, the S&P 500 closed @ 1156, and that was...
  
    -5.7% BELOW its 12-Month moving average which stood @ 1225.
    -9.5% BELOW its 40-Week moving average which stood @ 1277.
    -0.8% BELOW its 10-Week moving average which stood @ 1165.


Therefore, the INTERMEDIATE-Term trend IS BEARISH and the LONG-Term trend is BEARISH.

Long-Term Care: 70% of Americans Over Age 65 Will Need It...

Some 70% of Americans older than age 65 will need long-term care, meaning help with daily activities such as eating and bathing, according to the U.S. Department of Health and Human Services. 


Yet the same survey found that almost no one had discussed long-term care insurance with a financial adviser or lawyer.

Retirees and Annuity Income Study Findings...

• 35% — Of all retirees receive income from an annuity
  
  
  
• 40% — Of retirees say their annuity income is guaranteed for life
  
  
  
• 49% — Of retirees age 75-79 receive income from an annuity
  
  More than a third (35%) of retirees receive income from an annuity, a recent LIMRA study has documented. That percentage, however, could increase as fewer Americans retire with a pension.
  
  Jafor Iqbal, associate managing director, LIMRA Retirement Research, noted in a release detailing the results of the study that the majority of current retirees rely primarily on pensions and Social Security to fund daily living expenses, with annuities accounting for only 4% of their income.
  
  “But in the coming years,” he said, “we expect to see fewer Americans retiring with pensions and more relying on their personal savings to fund their retirement. Annuities will provide a reliable way to convert that savings into a guaranteed income stream.”
  
  The online survey was conducted in October of last year and polled qualified respondents age 55 to 79 who had been retired for at least one year and had household incomes starting at $35,000.
  
  
  

S&P 500 On A Long-Term Monthly Sell Signal Since August 31, 2011

Net Worth of IRA and 401(k) Owners...

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday, September 30, the S&P 500 closed @ 1131, and that was...
  
    -8.6% BELOW its 12-Month moving average which stood @ 1238.
  -11.5% BELOW its 40-Week moving average which stood @ 1279.
    -4.0% BELOW its 10-Week moving average which stood @ 1178.


Therefore, the INTERMEDIATE-Term trend IS BEARISH and the LONG-Term trend is BEARISH.