On it with Offit
BY BEN OFFIT, CFP®
Interesting Tidbits
New to investing and not happy with your stock market returns thus far? Just stick with it. The market is positive just a little more than half of days. Stretch that out over a year and the odds you’re up are about 75%, over 3 years over 85%, and over 10 years about 96%
- Peter Mallouk
About half of the top-grossing concert tours in North America last year were led by artists who were 60 years old or older. The top three spots were held by artists in their 70’s: The Rolling Stones, Elton John, and Bob Seger. Others included Paul McCartney, Billy Joel, Cher, and Fleetwood Mac.
- The New York Times, January 7, 2020
Someone who saved $10,000 a day since the construction of the Egyptian pyramids would still be 80% less wealthy than the world’s five richest billionaires.
- ProPublica, January 22, 2020
“A lie can travel halfway around the world while the truth is putting on its shoes.
- Mark Twain
In the United States today, there are roughly 76,000 electric vehicle charging stations, compared with 168,000 stations that serve gas.
- MarketPlace, January 9, 2020
The estimates of the coming American job losses due to automation vary wildly, from 10% to 47%. However, technology could also create as many as 50 million new jobs by 2030.
- Axios, December 8, 2020
Baby boomers said they trusted the average American brand 63% of the time and tended not to trust it just 26% of the time. By comparison, Gen Z, those 18 to 22, trust the average American company just 38% of the time and 42% said they tend not to. The single-most trusted brand in America? The U.S. Postal Service.
- Morning Consult, January 15, 2020
“I’m sick of hearing how we celebrities are in some kind of bubble and we don’t understand real life. When I am out in public and people approach me, I’m always interested in what they have to say to my security detail.”
- Pat Sajak
“The truth is always different from what anyone says out loud.”
- Stephen Dunn
The third year of a president’s term tends to be the best, so 2019 was in keeping with that trend. Also, stocks are up 66% of the time in a president’s fourth year.
- CIO.com, November 21, 2019
In emerging markets, roughly 5 people enter the middle class every second.
- Axios, October 13, 2018
“War is God’s way of teaching Americans geography.”
- Ambrose Bierce
Offit Advisors is excited to announce that we are expanding to Columbia, MD in Spring 2020.
Ben Offit was featured in the Money Matters Podcast, discussing how his career started, and how Offit Advisors is building into becoming a 'one-stop-shop" for financial planning . Click here to listen.
Ben Offit was featured in a webinar by the University of Maryland, his alma mater. He discussed how to effectively achieve your financial goals in 2020.Click on the picture above to view.
IMPORTANT UPDATES!
GOAL TRACKER for our Financial Planning Clients
If you are a financial planning client, you may be familiar with the use of the Goal Tracker Planning Tool. We have good news for you as we have made this a digital portal which allows our clients to track what we are working on, what we have completed together, and what we intend to explore in the future. Here is the link for our financial planning clients to register!
https://offitadvisors-sandbox.mxapps.io/login.html
AND
Did you know that if you have a non-retirement investment account, you will need to file a 1099 on your income taxes regarding this account. These tax documents will be mailed to you. Please remember to share this with your CPA!
Market Update
Equity Markets
Equity momentum continued into the New Year with U.S. stocks hitting new all-time highs during the first part of January. Phase one of the trade deal with China was signed mid-month and markets have reacted positively to this lessening of trade tensions. The U.S. Mexico Canada Trade Agreement was also signed at the end of the month. The Trump impeachment proceedings have continued as expected and at the end of January, it appeared that no witnesses would be called in the Senate likely leading to a swift conclusion of this event in early February. The market has been anticipating this outcome for some time (impeachment by the House but no Senate conviction or removal from office) and therefore, the market has not been too sensitive to developments on this front.
Also as expected, the Fed held rates steady at the first FOMC meeting of 2020 in late January. Although the Fed continues to monitor incoming economic data, the hurdle for additional rate moves appears high this year, but the economic slowdown that is unfolding as a result of the coronavirus has increased the odds of a rate cut. The Fed has also been engaging in notable liquidity operations which are scheduled to end this summer.
Large-cap U.S. equities, particularly U.S. large-cap growth companies, led the market once again in January after some other parts of the market had performed well over the prior few months.
The numbers for January were as follows: The S&P 500 was slightly lower, down -0.04%, the Dow Jones Industrial Average was off -0.89%, the Russell 3000 slipped by -0.11%, the NASDAQ Composite rose an impressive 2.03% and the Russell 2000 Index, a measure of small-cap companies, was one of the weaker pockets of the market, down -3.21%. As mentioned, growth stocks outpaced value stocks dramatically for the month.
The large-cap and value focused Russell 1000 Value Index declined -2.15% compared to the Russell 1000 Growth Index, which advanced 2.24%. The difference was equally as dramatic in the small-cap universe, but both value and growth small-cap stocks declined in January, meaning once again that large-caps ruled for the month. Small-cap value stocks, as measured by the Russell 2000 Value Index, declined -5.39%, while the Russell 2000 Growth Index fell -1.10%.
International equities struggled as well kicking off 2020 with both emerging market equities and developed market stocks declining in January. The U.S. dollar strengthened in January, which was another headwind for U.S. investors on their international holdings. Emerging market equities, as measured by the MSCI Emerging Markets Index, fell -4.66% in January. The MSCI ACWI ex USA Index, a broad measure of international equities, declined -2.69% to begin the new year.
Fixed Income Markets
Bonds rallied in January as a flight to quality hit the market amid the coronavirus developments. The yield on the 10-year U.S. Treasury fell to 1.51% by the end of January, after ending 2019 with a yield of 1.92%. Even more dramatic, the yield on the 30-year U.S. Treasury fell below 2% at the end of January, closing the month with a yield of 1.99%. Most pockets of fixed income gained in January, but those more interest-rate sensitive parts of the market such as US Treasuries, were the clear leaders to begin the New Year.
Driven by a declining interest rate environment, the returns in fixed income were as follows: the Bloomberg Barclays U.S. Aggregate Bond Index gained 1.92%, the Bloomberg Barclays U.S. Credit Index advanced 2.34%, the Bloomberg Barclays U.S. Corporate High Yield Index was only fractionally higher, up 0.03% and longer-dated U.S. Treasuries were among the best gainers. For example, the Bloomberg Barclays U.S. 30-year Treasury Index advanced 8.27% in January and the Bloomberg Barclays U.S. Treasury Index gained 2.44% for the month. TIPS and muni bonds both advanced in January as well.
S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index.
Dow Jones Industrial Average - The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy.
NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes approximately 5,000 stocks, more than most other stock market indices. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indices.
Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index which includes the 3,000 largest companies in the U.S., based on market capitalization. As of the latest reconstitution, the average market capitalization was approximately $762.8 million; the median market capitalization was approximately $613.5 million. The largest company in the index had an approximate market capitalization of $2.0 billion and a smallest of 218.4 million.
Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
Government bonds are guaranteed by the U. S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value.
Offit Advisors
28 E Susquehanna Ave
Towson, MD 21286
Phone + Fax: 410 600 PLAN (7526)
E – BOffit@OffitAdvisors.com
W- www.OffitAdvisors.com
To schedule an appointment with us, click here!
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Offit Advisors. is not affiliated with Kestra IS or Kestra AS.
