*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright February 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2964203.1
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Market Commentary For the Week of February 24, 2020
The three major indexes dropped on Friday and also ended the week lower. Concern over the economic impact of the coronavirus and data indicating U.S. business activity slowed last month led investors to move to safe haven assets like gold and Treasuries. For the week, the Dow fell 1.36 percent to close at 28,992.41. The S&P lost 1.22 percent to finish at 3,337.75, and the NASDAQ dropped 1.55 percent to end the week at 9,576.59.
|Returns Through 2/14/20||1 Week||YTD||1 Year||3 Year||5 Year|
|Dow Jones Industrials (TR)||-1.36||-0.89||15.79||15.15||13.21|
|NASDAQ Composite (PR)||-1.55||2.03||27.03||18.96||15.88|
|S&P 500 (TR)||-1.22||-0.04||21.68||14.54||12.37|
|Barclays US Agg Bond (TR)||0.57||1.92||9.64||4.62||3.01|
|MSCI EAFE (TR)||-1.24||-2.09||12.10||7.76||5.12|
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.
Coronavirus Impact — China forecast it would use 25 percent less oil per day in February when compared to its actual usage in February 2019, a drop of 3.2 million barrels a day from 12.9 million barrels to 9.7 million (source: International Energy Agency, BTN Research).
Hard to Enjoy Retirement — 54 percent of American workers have not started a defined contribution retirement plan at work (e.g., a 401(k) plan) or do not have access to a defined benefit pension plan funded exclusively by their employer (source: Center for Retirement Research at Boston College, BTN Research).
Financially Ready? — The life expectancy of a 65-year-old American is 19½ years or 234 months (source: Center for Disease Control, BTN Research).
WEEKLY FOCUS – America Saves Week, Feb. 24-29
According to a recent Bankrate survey, 21 percent of Americans don’t save any portion of their annual income. Twenty percent save 5 percent or less, and only 16 percent save more than 15 percent. No matter where you find yourself, the following psychological tricks may help you increase your savings rate in 2020.
Think big but start small. Break your long-term goals into mini goals, e.g., a target amount you want to save in the next three months. As an added incentive, you might plan a small reward when you reach your immediate goal.
Calculate purchases differently. To weigh how much you really value something you’re tempted to buy, look at its price tag in the number of hours you’d need to work to pay for it. Or, picture a stranger holding the item you’re considering in one hand and the amount of cash it costs in the other. Which is more appealing?
Put off the urge to splurge. It’s easier to delay gratification than deny it. So, wait 24 hours before making small discretionary purchases or 30 days before making bigger purchases. The passion for the item will often wane as time passes. Accelerate your savings and reset your purchasing appetite by designating a few weeks or a month as a period of no unnecessary purchases.
Automate your savings. Since most of us aren’t impulsive savers, we need to be intentional savers – putting money aside before we succumb to temptations to spend. So, increase the amount of your check that goes to your 401(k) or ask your employer to split your direct deposit into your checking and savings accounts.
Make wise purchases. Comparing prices and reading reviews usually results in securing better values and slows impulse buying. Timing is another way to save. When possible, purchase clothes and food in season. Shop for a new computer in April, mattress in May, television in November or home appliance in December.
America Saves Week is an annual reminder to double check your financial stability and encourage you to save. Take the time this week to call our office to set up a review of your retirement plan or to receive help with explaining the importance of savings to younger generations. https://www.bankrate.com/banking/savings/financial-security-march-2019/
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