POCKETBOOK:Week ending July 30,2016

  • IMG_0204•The wealthy and Social Security

Everybody loves getting their much-earned Social Security checks. Even those with loads of money depend on them.

A research study from the Spectrem Group, Social Security: When and Why, of 634 affluent American investors age 55 and over, 18 percent of those currently receiving benefits rely on the checks for at least half of their income, according to a recent story at WealthManagement.com.

The study divided the group into three wealth segments:: Mass Affluent (with investable assets of between $100,000 – $999,999); Millionaire ($1 million – $4.99 million); and Ultra High Net Worth ($5 million – $25 million).

From the  July 26  story “The Wealthy Rely on Social Security Benefits Too” comes this: “Fifty-one percent of the affluent individuals surveyed currently receive at least 25 percent of their retirement income by way of Social Security benefits. This figure includes nearly one-third (29 percent) of ultra high net worth respondents, the wealthiest group surveyed by a significant margin, for whom you’d think Social Security would represent merely a drop in the bucket. Apparently you’d be wrong.”

  • Market Quick Glance

A bit of  a pull-back  based on the weekly closing YTD performance numbers of four popular US indices as of Friday, July 29, 2016, according to Bloomberg. One-year performance figures  also included.

Looking ahead, August, as a stand alone month, has not rewarded investors very much if a 20-year history is any guide. According to a number of sources, it  has been the worst performing month of the 12 that make up a year.

But when it comes to historic returns, nothing is ever as simple as it first appears. According to Bespoke, yes, the average loss for the Dow during the month of August is a decline of 1.3 %, but 55% of the time the Dow ended on a positive note.

-Indices:

-Dow Jones +7.38% YTD (Down a bit)

  • 1yr Rtn +7.01% (Ditto)

-S&P 500 +7.66% YTD (Down a bit)

  • 1yr Rtn +5.60% (Ditto)

NASDAQ +3.87% YTD (An improvement)

  • 1yr Rtn +2.02% (Also improved)

Russell 2000 +8.31% YTD (Up a bit)

  • 1yr Rtn -0.01% (Down a bit)

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up 5.52 % at  the close of business on Thursday, July 28, 2016, according to Lipper.

Equity Leverage Funds continued to pick up steam gaining more than 2% during the week to close at +22.82% on average. Dedicated Short Bias Funds performed the poorest, down on average 19.29%.

Precious Metals Equity Funds picked up a bit. Thursday’s close showed the average return for this group up 7% from the previous week and atmore at 116.17% YTD.

Latin American Funds are also making their investors smile: up 30.5% year-to-date on average.

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • August, September and October

Anyone living in South Florida is well aware that August and September are often the hottest months of the year. Throw in the month of October and when comes to hurricanes, it’s within those three months when most cyclones have occurred in the hot and sweaty Sunshine State.

Also not to be overlooked is the historical fact the during the months of August and September the markets have a higher rate of market corrections. Throw in October, and according to SeekingAlpha contributor Lance Roberts, “ We are about to step into a seasonality ditch: lowest 3-month returns Aug-Oct for S&P going back to 1928.”

Prepare for the heat.

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