Record Low Jobless Claims

September 24, 2018

The number of new jobless claims just reached its lowest level since November of 1969.  That alone is impressive, but to truly get an understanding of the tightness of today’s labor market it has to be compared to the size of the U.S. labor force.  Indeed, the U.S. labor force has more than doubled over the last 49 years from 81,106,000 people to 161,776,000 last month.  Jobless claims adjusted for the size of the U.S. labor force, are now at the lowest level since the Department of Labor started reporting monthly jobless claims in 1967.

 

The Buffett Indicator

August 6, 2018

Legendary investor Warren Buffett’s favorite metric of stock valuations is currently suggesting that a stock market setback could be coming.  While anything from Buffett brings up memories of the television commercials from the 1970’s that with the tag line “When E.F. Hutton talks, people listen”, Buffett’s favorite indicator is both historically effective and remarkably simple to calculate.  The indicator is simply the ratio of the total market capitalization of all U.S. stocks divided by the latest Gross Domestic Product (GDP) reading.  Of concern is that the current value of this ratio has never been higher.  While no indicator is correct 100% of the time, the Buffett indicator is remarkably accurate.  As a general rule, if the indicator falls below 80-90%, it has historically signaled that stocks are cheap.  Likewise, levels significantly higher than 100% can indicate stocks are too expensive.  For example, the Buffett indicator peaked at 145% right before the dot.com bubble burst, and reached 110% before the financial crisis.  Where does it stand now?  149%. (Chart from motleyfool.com)

How much are you putting away for retirement? This article examines one area (actually, there are many) that may conflict with one’s ability to invest a sufficient sum for retirement.

http://awealthofcommonsense.com/2018/07/are-suvs-ruining-retirement-savings/

You have probably read that the sooner you begin saving, the better, because the magic of compounding can make you wealthy. But what if you don’t start early and still want to accumulate a nest egg that will carry you through your retirement years? The article below shows the amount you must save and the amount you must earn annually to reach $1,000,000. The assumption is that you contribute to a 401(k), and eventually max out your annual contributions.

http://awealthofcommonsense.com/2018/07/how-hard-is-it-to-become-a-401k-millionaire/

 

Retirement brings on a significant change of life. Schedules change. Routines change. Responsibilities change. As a result, we can feel a lack of purpose and loss of daily contact with those with whom we worked. Add to all those changes, a significantly increased amount of time with your spouse. The linked article below offers some good ideas for preparing for increased time together and not letting all of the other changes in your life change what is most important.

https://www.marketwatch.com/story/how-couples-can-avoid-driving-each-other-crazy-in-retirement-2018-07-06

This article examines the question many people ask about when to start Social Security income.

 

http://www.wealthmanagement.com/retirement-planning/show-me-social-security-money?NL=WM-27&Issue=WM-27_20180625_WM-27_796&sfvc4enews=42&cl=article_1&utm_rid=CPG09000007845439&utm_campaign=14815&utm_medium=email&elq2=3df847024cf44bf4bba2b3742f1cca97

This is an interesting survey and article. Some count wealth in terms of dollars or other possessions. Others count wealth in terms of relationships and contentment. Obviously, we need money to live our lives, but true wealth has different meanings to different people.

https://www.bloomberg.com/news/articles/2018-05-15/how-much-money-do-you-need-to-be-wealthy-in-america

 

For the first time ever, there’s now a job opening available for each and every unemployed worker.  According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), there were 6.6 million job openings in March, compared to 6.59 million unemployed workers.

The government collected $515 billion and spent $297 billion, for a total monthly surplus of $218 billion. That swamped the previous monthly record of $190 billion, set in 2001.

https://www.washingtontimes.com/news/2018/may/7/cbo-says-april-was-best-month-history-us-budget/

While Target Date Funds in 401(k) plans have performed well since the Bull Market that began 2009, this article does a good job of exposing the risk in those funds.

https://www.thewealthadvisor.com/article/will-your-target-date-401k-fund-blow-your-retirement?