POCKETBOOK: Week ending April 27, 2018

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  • Amazon’s piggy Prime fees

Figure pretty much everybody on Earth is familiar with Amazon, the company.

As for it’s Prime arm, that benefits program didn’t begin until 2005. Since then, the program has garnered 100 million members. That’s a boatload of members, if you ask me. And at $99 a year for membership, the dollars racked in from it is mountainous—as in an almost unfathomable $9,900,000,000. Said out loud, that’s “9 billion 900 million dollars”. Which, apparently, isn’t enough for Jeff Bezos’ company to keep it going.

So next month –on May 11– an Amazon Prime annual membership fee is going up not 10 but 20% to $119.   That translates to 100 million Prime members paying a total annual membership fee to Amazon of $119. Said out loud that’s “ 11 billion 900 million dollars.”

And that’s a pigish amount.

So, if you’re in the camp that remembers how it was often said that Amazon doesn’t make any money, it’s time to rethink that.

According to Redode.net, in a piece dated Feb. 1, 2018, the headline read:“Amazon has posted a profit for 11 straight quarters—including a record $1.9 bilion during the holidays.”

Hum.

  • Market Quick Glance

A downer of a week for all but one (NASDAQ) of the major indices year-to-date returns followed here. Additionally, all four of their 1-year reurns were lower than they were the previous week.

FYI, it’s been since January that  new all-time highs were reached on three of the four indices followed below; the DJIA, the S&P 500 and the Russell 2000. NASDAQ hit its last new high in March.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, April 27, 2018.

 

DJIA -1.65% YTD down more than the previous week’s -1.05%

  • 1 yr Rtn 15.87% down from the previous week’s 18.87%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 -0.14% YTD down a hair more than last week’s -0.13%

  • 1 yr Rtn 11.77% down from last week’s 13.34%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 3.13% YTD down from last week’s 3.52%

  • 1yr Rtn 17.70% down from last week’s 20.78%

Nasdaq reached a brand new all-time high on March 13, 2018 of 7,637.27. The previous high was reached on March 9, 2018 of 7,560.81.

 

-Russell 2000 1.35% YTD down from than last week’s 1.86%

  • 1yr Rtn 9.82% down from last week’s 13.00%

 

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

At the close of business last Thursday, April 26, 2018, the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of 0.65%, according to Lipper.

Small-Cap Growth funds that were up on average 6.27% a week earlier, lost ground and now had an average return of 4.42%.

On the other hand, the average return for Dedicated Short Bias Funds had improved and were now down only -5.43% instead of their score from the previous week of -6.97%.

Anybody who wants to jump up and down and boast about their fund’s returns must be shareholders in science and tech funds as the average Science & Technology Fund’s y-t-d return is 5.46% with the Global Science & Technology fund not far behind at 5.25%.

Visit www.allaboutfunds.com for more information about 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.

 

  • Fund fees headed down

Morningstar began tracking the fees on mutual funds 18 years ago in 2000. Since then, fees for funds have dropped dramatically. As they should have.

According to their Press Release dated April 26, 2018, “Morningstar estimates that investors saved more that $4 billion in fund fees in 2017 by continuing to gravitate toward lower-cost fees.”

Lowering fees is a big plus for fund shareholders—not so much for the fund company.

That said, every penny counts when it comes to an investor making any money from their fund or ETF investments.

Morningstar reported that most investors choose lower-priced funds. The three fund families offering the lowest asset-weighted fund ratios include Vanguard with its average expense ratio of 0.10%; State Street Global Advisors, 0.16%; and iShares, 0.25%.

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