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One more time: We don’t need tax reform
More than anything in the world, the Republican party wants to make sure that they accomplish something during the first 300-and-some days since the President Trump has been in office.
Doing something is a good idea. Tax reform, or whatever it winds up being called, isn’t.
Here’s the main reason why I think that is so: When taxes are cut, somebody or something has to pay in one way or another to cover the government coffer shortfalls the tax cuts create.
Any decrease in monies flowing in will translate into an increase in America’s defecit and could make unwelcomed changes to things such as our Vet’s programs, Medicare, Medicaid, SNAP and other much needed government funded impacts-people programs.
Plus, while 800-to-1200 bucks a year in savings for the average person amounts to something, the cuts will more than likely cost middle and lower-income people more than that with respect to their annual health care costs and deductions allowed on their tax returns depending upon the state in which they live.
And, history has shown that the trickle-down talk of how tax reforms/cuts translate into more jobs and higher wages is just that—talk. The same kind of poppycock talk similar to the election promises Trump made to the coal miners telling them that their coal jobs would be coming back.
Or the Paul Ryan talk about how America has been in a horrible mess ever since the Great Recession began. Someone must not have shown him a chart showing that GDP growth has been being improving since that recession or one showing the roaring returns that the stock market has provided investors. Or the one with a snapshot of how corporations already have tons of money on their balance sheets available for spending should they desire to spend it.
If the party in power wants to make a positive impact, why not pass a bill that creates jobs focused on improving our country’s roads, bridges and all around infrastructure? Or one that limits the types and number of guns individuals can own? Or requires background checks for anyone purchasing a gun at a trade show, or online? Or provides health care for all without strings attached?
Those kinds of changes would make a big everyday difference in the lives of most Americans.
Tax cuts not so much.
But no matter how you feel, why call your state Senator’s office today and voice your “yeah” or “nay” on the subject.
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Market Quick Glance
A bit of a downer last week. But if history is any guide, Thanksgiving week is more often than not a good week for stocks in the S&P 500.
According to the fine folks at the Bespoke Investment Group, the S&P 500 has averaged a gain of 0.65% during the four-day Thanksgiving week. “And in years when the S&P is up 10%+ YTD heading into Thanksgiving week (as it is this year), returns during the week are even stronger.”
We shall see….
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, November 17, 2017.
–DJIA +18.19% YTD down from last week’s 18.52%.
- 1 yr Rtn +23.56% down from last week’s 24.27%
The DJIA most recent all-time high of 23,602.12 was reached on November 7, 2017.
Its previous high of 23,557.06 was reached November 3, 2017. On March 1, the Dow stood at 21,169.11.
-S&P 500 +15.19% YTD down from last week’s 15.34%.
- 1yr Rtn +17.91% down from last week’s +19.31%
The S&P 500 reached its most recent new high on November 7, 2017 of 2,597.02
Its previous high of 2,588.42 was reached on November 3, 2017. On March 1, 2017, that index stood at 2,400.98.
-NASDAQ +26.00% YTD up from last week’s +25.66%.
- 1yr Rtn +27.16% down from last week’s 28.91%
The Nasdaq reached a new all-time high of 6,806.67 on November 16, 2017.
Its previous high of 6,795.52 was reached on November 7, 2017. On April 5, 2017 the index closed at 5,936.39.
-Russell 2000 +10.00%YTD up from last week’s +8.71%
1yr Rtn +14.00% down from last week’s +15.04%
The Russell 2000 reached a new all-time high of 1,514.94 on October 5, 2017. On March 1, 2017 this index stood at 1,414,82.
-Mutual funds
Moving up a tiny bit.
The year-to-date average cumulative total reinvested return for equity funds falling under the broad U.S. Diversified Equity Funds was +14.34% at the close of business on Thursday, November 16, 2017, according to Lipper. That’s up from the previous week’s return of +14.24%.
- The highest and lowest average y-t-date returns under the U.S. Diversified Equity Funds heading were:
-Highest: Equity Leverage Funds, +33.72%
-Lowest: Alternative Equity Market Neutral Funds, -0.18%
The average return for funds under this heading was +14.34%.
- The highest and lowest average y-t-date returns under the Sector Equity Funds heading were:
-Highest: Global Science/Technology Funds, +46.84%
-Lowest: Energy MPL Funds, -11.68%
The average return for funds under this heading was +9.76%%.
- The highest and lowest average y-t-date returns under the World Equity Funds heading were:
-Highest: China Region Funds, +43.84%
-Lowest: Global Equity Income Funds, +13.62%
The average return for funds under this heading was 24.72%.
- The highest and lowest average y-t-date returns under the Mixed Asset Funds heading were:
-Highest: Mixed-Asset Target 2055+Funds, +17.54%
-Lowest: Alternative Multi-Strategy Funds, +3.26%
The average return for funds under this heading was 11.28%.
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.
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What’s up for 2018?
There’s already been lots of speculation going on about how the markets will perform in 2018 and Jack Bogle, founder of Vanguard, is one of them forecasting.
Bogle, who is now retired, is predicting that going forward into the New Year and beyond that the U.S. market will be a better bet than global markets; average returns on stocks are going to be much lower—as in the 4% annual return area—over the next 10 years; and bond portfolios will increase into the +3% average annual 10-year returns.
More than one experienced talking head agrees.
Wishing you plenty to be thankful for and a happy thanksgiving week.
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