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

On Friday, January 21, the S&P 500 closed @ 1283, and that was...
  
   +10.8% ABOVE its 12-Month moving average which stood @ 1158.
   +11.3% ABOVE its 40-Week moving average which stood @ 1153.
     +3.0% ABOVE its 10-Week moving average which stood @ 1246.


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

And AARP's Baby Boomer Survey Says....

Every day during this year, more than 7,000 boomers will turn 65 years old. AARP's December survey of boomers turning 65 in 2011 finds the first wave boomers are, for the most part, satisfied with their lives now and optimistic about the future.

Among the top concerns for these boomers are financial security and improving their health.

Some boomers turning 65 have age-related concerns similar to ones their parents experienced when they were 65. They have found, like their parents, they want to age in place, and chronic health conditions and financial responsibilities will influence how they will live the last third of life.

But the soon-to-be 65-year-olds differ from their parents in one important aspect: retirement. The survey shows baby boomers overall and many of those turning 65 consider work to be part of retirement, and a significant percentage say they never will consider themselves retired.

Other key findings are:

78% of those turning 65 this year say they are satisfied with how their lives are going today. Five years ago, 77% of boomers said they were satisfied.

More boomers feel they are worse off than feel they have done well in terms of their financial security and health.

Only about 40% respondents say they are about where they expected to be in these same areas.

A majority of boomers, 70%, turning 65 say they have achieved all or most of what they wanted out of life, and 26% say they have achieved some of what they wanted. Just 3% say they have achieved little or none of what they wanted out of life.

Boomers turning 65 also expect to live about the same number of years as they wish to live. On average, boomers turning 65 wish to live to about 88.7 years, and they expect to live until they are 85.2 years old.


Source: AARP

Quote of The Day: Markets & Politicians

"Markets don't lie. Politicians do."

Why Do We Put So Much Blind Faith In The Federal Reserve?

The Federal Reserve released a 3-year forecast for our nation's unemployment rate on 11/20/2007.  

The Fed believed that unemployment would be no higher than 4.9% during calendar year 2010.

As of 12/31/2010, the national unemployment rate was 9.4%.

(source: Federal Reserve, Department of Labor)

High Unemployment Is Good for the Stock Market!?

Since 1948, the stock market has returned, on average, 6.6 times more per year when unemployment has been considered historically high than when it has been low!


According Ned Davis Research, when the rate of unemployment has been above 6%, the S&P 500 has gained ground at a rate of +13.9% per year.


However, when the unemployment rate was considered “low” (4.3% or below) the S&P has gained at an annualized rate of just +2.1% per year!

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

On Friday, January 14, the S&P 500 closed @ 1293, and that was...
  
   +11.5% ABOVE its 12-Month moving average which stood @ 1160.
   +12.4% ABOVE its 40-Week moving average which stood @ 1151.
     +4.5% ABOVE its 10-Week moving average which stood @ 1238.


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

Working for the Government

1 out of every 6 American workers (17%) is employed by the government, either at the federal, state or local level .


Source: Department of Labor

Is Everyone Paying Their Fair Share?

Americans filed 140 million tax returns for calendar year 2008 income. 

Through the use of deductions, exemptions and credits, 52 million tax returns of the 140 million total returns (or 37% of all returns filed) paid zero federal income tax.

Source: Internal Revenue Service


 

5 Stats That Retirees Should Be Aware of...

1. Less than 1 in 5 working Americans (19%) is contributing enough money on a pre-tax basis to his/her retirement accounts to realistically project that he/she will be able to retire by age 65 (source: Nyhart, Tom Totten, Craig Harrell). 


2. 52% of retirees are still making monthly payments on home mortgage debt (source: Society of Actuaries).  


3. Life expectancy at birth of Americans has increased by 10 years in the last 60 years, reaching 78.3 years today.  Thus since 1950, life expectancy at birth has increased by 2 months every year (source: Center for Disease Control).  


4. 34% of American workers age 60-69 believe that their greatest financial risk during their retirement years is a catastrophic out-of-pocket expense associated with a major health event.


5. An additional 26% of American workers feel their greatest financial risk is outliving the retirement assets they have accumulated (source: Hartford Financial Services Group).

A Half A Million Dollar College Education?...

A child born in 2010 that begins kindergarten in the fall of 2015 would attend college between the years of 2028 and 2032. 

If that child attended an average private 4-year college and if the annual price increases for private colleges experienced over the last 30 years continued into the future, the aggregate 4-year cost of the child's college education (including tuition, fees, room & board) will total $506,423, or nearly $127,000 per year.

Source: College Board


   

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

On Friday, January 7, the S&P 500 closed @ 1272, and that was...
  
   +10.5% ABOVE its 12-Month moving average which stood @ 1156.
   +10.8% ABOVE its 40-Week moving average which stood @ 1148.
     +3.3% ABOVE its 10-Week moving average which stood @ 1231.

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

Baby Boomers Biggest Worries...

The Case for An Up Stock Market in 2011...

This year (2011) will be the 3rd year of Barack Obama's 4-year presidential term that began in January 2009. 

The S&P 500 stock index has posted a positive total return during the last 17 "presidential 3rd years." 

The last time the S&P 500 was negative during a "presidential 3rd year" was 1939! 

The average annual return of the S&P 500 during a "presidential 3rd year" since 1950 is a gain of +22.0%!


Source: BTN Research


   

Chart of The Day - Average Pre-Election Year - Historical Performance

Today's chart illustrates how the stock market has performed during the average pre-election year. Since 1900, the stock market has tended to outperform during the first 6 to 7 months of the average pre-election year.

For the remainder of the year, pre-election performance has tended to be choppy and slightly subpar. In the end, however, the stock market has tended to outperform during the entirety of the pre-election year.

One theory to support this behavior is that the party in power will make difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.

Chart & Commentary Courtesy of Chart of the Day

Leave An Infinite Legacy for Future Generations! - Become Your Own Banker and Bank On Yourself!

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

On Friday, December 31, the S&P 500 closed @ 1258, and that was...
  
   +10.8% ABOVE its 12-Month moving average which stood @ 1133.
     +9.7% ABOVE its 40-Week moving average which stood @ 1139.
     +2.9% ABOVE its 10-Week moving average which stood @ 1199.


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

Quotes of The Day: Keynes & Friedman on Inflation...

"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." 
- John Maynard Keynes

"Inflation is taxation without legislation."
 - Milton Friedman

Baby Boomers To Inherit More Than $11 Trillion

According to Metlife’s Study of Inheritance and Wealth Transfer to Baby Boomers, there may be a glimmer of hope for baby boomers, many financially burdened, who could possibly inherit more than $8 trillion, mostly from parents and grandparents. 

Roughly 67% of all boomers are set to receive some inheritance in their lifetime.

The study also reports boomers have or will receive a substantial sum from their parents while they are still alive, which increases the total transfer of wealth to $11.6 trillion. 

The median inheritance per person is $64,000, and $2.4 trillion has already been given. The wealthiest boomers expect to receive an average of $1.5 million, and the least wealthy will be left $27,000, a sum that represents a larger percentage of the latter group's overall wealth.

Here are some key findings from the study:

63% of inheritances and 74% of dollars are from parents to children, and the grandparents are the 2nd most common source. Most boomers will receive their inheritance in late middle age.

Although only 17% of boomers had received an inheritance by 2007, 67% will eventually receive one.

The adjusted-for-inflation median amount boomers received by 2007 is about the same as the amount received by the preceding 1927-1945 birth group at the same ages.

3 MORE Life Insurance Myths - Part 2

Last week (December 22) we covered the first three common life insurance myths. Here are the next three:

4.“Buy term and invest the difference.” Mitch Kenvin, an advisor in Dallas with Personal Economics Group and an agent with American United Life has been encountering this myth for 20 years. It’s an interesting notion, he says, but it just doesn’t work in reality.

“People, especially with term insurance, run low on money, lose a job, and it’s always the first bill to go. They’re going to pay the mortgage before they pay their life insurance premium. The theory of buying term and investing the difference is fine except that it never comes to fruition.”


5.“Seniors don’t need life insurance.” This myth pops up frequently in the financial media: Once you’re close to or in retirement, you can drop your life insurance. That’s often a bad idea, says Donald Lippencott, MSFS of the Lippencott Financial Group in Port Jefferson Station in Long Island.

“I have sat with clients for the last 27 years, and the ones that were 45-years-old 27 years ago, who are now knocking on the door of 70, are wishing that they had more and better types of coverage,” Lippencott says.


6.“Every senior needs life insurance.” This is the flip side of number two. Both involve generalizations that often don’t fit a particular situation. The advisors who buy into this myth start with the life insurance product, and then work back to the client’s needs, says Dan Forbes, CFP in Providence, R.I. Forbes says a more suitable approach is to identify the need, and then determine the most appropriate method or product to meet that need.

That approach can lead to the conclusion that some older clients don’t need life insurance, he says:

“If you’re not protecting a pension or if you’re not interested in leaving a sum of money to your beneficiaries or heirs, or if you haven’t recently taken out a long-term mortgage at retirement, it can be hard to justify having a life insurance policy.”

Here's the link to the first 3 life insurance myths: 1, 2, and 3...
3 Life Insurance Myths - Part 1

Baby Boomers Retirement Status...

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

On Friday, December 24, the S&P 500 closed @ 1257, and that was...
  
   +10.7% ABOVE its 12-Month moving average which stood @ 1135.
   +10.0% ABOVE its 40-Week moving average which stood @ 1143.
     +3.4% ABOVE its 10-Week moving average which stood @ 1215.


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

Quote of The Day: Sir Winston Churchill on Optimism...

“The pessimist sees difficulty in every opportunity.” 

“The optimist sees opportunity in every difficulty.”  

 - Sir Winston Churchill

Baby Boomers By The Numbers...

3 Life Insurance Myths - Part 1

Life insurance is a fairly straightforward financial product. Nonetheless, there are numerous myths about its purpose, features and cost.

1. “I don’t believe in life insurance.” This myth is based on doubts that life insurance has value, and the prospect will encounter a situation where he or she might benefit from the coverage. There’s often something deeper behind that myth, says Matt Dobbie, president and CEO of uFinancial, a MassMutual agency in Camp Hill, Pa.

“I think part of that myth comes from the fact that clients struggle with the reality that something can happen, and if it does, there are people in their lives who will be negatively impacted,” Dobbie says.

2. “Seniors can’t get life insurance at a reasonable cost.” It’s easy to understand this myth’s origins. Fran Jacoby, CLU, ChFC is a financial planner for Prudential in Indianapolis who encounters this notion frequently.

“When they reach, let’s say, 60-years-old, they think they can’t get life insurance at any reasonable cost,” she says. “They just believe it’s so expensive that they don’t want to think about it. [But then] they see that actually premiums are really quite affordable and that you can get life insurance at age 60.” Seniors also start worrying they can’t qualify for coverage.

“If your blood pressure is medicated and you are stable, we’re more than happy to give you really good rates” Jacoby says. “But people automatically think ‘I have high blood pressure. That’s a major illness; they won’t give me any coverage.’ But that’s not the case at all.”

3. “I can’t afford it.” This myth forces an advisor to get creative in freeing up resources. That may require reviewing the client’s budget, restructuring their debt, determining if they have nonproductive assets or reducing their tax liability to free up cash flow.

“A good financial advisor will help you find the dollars,” Dobbie says.


Here's the link to 3 more life insurance myths: 4, 5 and 6...
3 More Life Insurance Myths - Part 2

Understanding Rates of Return - Become Your Own Banker and Bank On Yourself!

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

On Friday, December 17, the S&P 500 closed @ 1244, and that was...
  
   +9.8% ABOVE its 12-Month moving average which stood @ 1133.
   +9.0% ABOVE its 40-Week moving average which stood @ 1141.
   +3.1% ABOVE its 10-Week moving average which stood @ 1207.


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

The U.S. Structural Unemployment Problem...

Initial jobless claims came in, as expected, at 420,000 on Thursday, December 16. That's an improvement over last week and shows improvement in the long-run.

But does it even matter?

The reality is that, while claims are improving, the U.S. has a structural unemployment problem that isn't being addressed.

There just aren't any jobs for workers who've been hit the hardest by the housing collapse, and with the way the housing market is going, there likely won't be for some time.

And that's why we're not seeing an improvement in the unemployment rate.


From WaverlyAdvisors.com (emphasis ours):

Note that the present situation is complicated by the fact that a weak market for unskilled workers were covered over by the housing boom, causing convergence in negative long and short term trends.

What does this mean? Simply that the structural nature of unemployment now is significantly different than during historical comparables and that moribund job creation can keep unemployment levels sticky even as claims begin to recede due to persistent long-term joblessness.

Why Interest Rates Are Jumping...

The chart below shows us that the yield on the 10-year T-Note has gone from a low of 2.38% on October 8th to 3.45% as of Tuesday’s close. That's a yield spike of over +44%!

The primary reasons for the jump are as follows:


1. Economic reports, including consumer spending and retail sales have exceeded expectations.

2. Economic growth is projected to improve in 2011 thanks to persistent quantitative easing by the Fed and the almost certain extension of 2010's tax rates for the next two years.

3. As a consequence of 1. and 2. above, the risk of a double-dip recession is abating, a primary reason why rates have stayed so low for so long.

4. The less the likelihood of a double-dip recession, the less the risk of a deflationary malaise and the greater the likelihood of inflationary pressures.

5. And the less the likelihood of a double-dip, the greater the likelihood stocks will outperform bonds in 2011. As a result, hedge fund managers and savvy investors are selling bonds to buy stocks. And the stampede for the exits before year end is adding further fuel to the momentum. Thirty-year T-Bond yields are also on the rise...

Quote of The Day: Bill Gates on Pessimism...

“Pessimism is so often wrong because people assume a world where there is no change or innovation. They simply extrapolate from what is going on today, failing to recognize the new developments and insights that might alter current trends.” 


- Bill Gates

Starting Your Own Leasing Company! - Become Your Own Banker and Bank On Yourself!