For the week ending March 12, 2016
•The power of stock buybacks
Analysts at HSBC report that it has not been investors who have caused the surge in stock prices ever since the market tanked in 2008-2009, but companies buying their own stocks back.
According to BusinessInsider.com, companies in the S&P500 have bought back nearly $50 billion of their own stock for a total of $2.1 trillion since 2010. The result has played a part in the seven year bull market.
But what happens when corporations stop buying their stocks back? Will the economy and/or investor interest be enough to carry the market higher, or, will time reveal that buybacks weren’t all that big a deal? Stay tuned.
•Market Quick Glance
Below are year-to-date performance figures for the major indices through March 11, 2016 according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.
-Dow Jones -0.53% YTD
1-yr Rtn -0.470 %
-S&P 500 -0.56% YTD
1-yr Rtn +0.62%
1-yr Rtn -1.25%
-Russell 2000 -3.99% YTD
1-yr Rtn -10.47%
By the end of the week, all four indices mentioned above had seen improvements in their year-to-date performance figures. In fact, the DJIA and S&P500 were both off less than 1 percent. And best of all, a + symbol has surfaced: The 1-yr return of the S&P500 was up 0..62 percent.
Through Thursday, March 10, 2016 the average U.S.Diversified Equity Fund was down 3.83 percent year-to-date, according to Lipper. That’s a tad worse than the previous week’s performance improvement.
Precious Metals Funds continue to be the hot diggity dog performer under the Sector Equity Funds heading, up 42.42 percent, on average, y-t-d. Latin American Funds, up 11.41 percent, on average, where the winning fund World Equity Fund type.
Of the 25 largest equity funds around, only 5 have plus-side year-to-date performance figures. The best performer in that group is Vanguard’s Total Bond ll fund, up 1.79 percent so far this year. That’s kinda sorta shocking given that a number of those funds are stock funds.
Visit http://www.allaboutfunds.com for weekly updates to see how 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 http://www.allaboutfunds.com in the left column on the home page.
-Oh those millennials
Expect to keep hearing more and more about this huger than baby boomer crowd, the millennials. Those kids, born between 1982 and 2000, now number 83.1 million and represent more than one-quarter of our nation’s population, according to the U.S. Census Bureau. Baby boomers total 75.4 million.
Given that people are living longer and that the cost of living a life continues to increase, one of the biggest challenges this group faces is saving for retirement.
While studies have shown millennials aren’t so sure Social Security is going to be around when they reach retirement age, the group has its own way of spending/saving.
A Sallie Mae survey found 77 percent pay their bills on time, prefer debit to credit cards, use mobile wallets and check their bank balances frequently.
They also like going out: A study conducted by Personal Capital found millennials spend about 60 percent of their food budget on dining at restaurants.