The Original On It With Offit
SAVE THE DATE!
SATURDAY, OCTOBER 5TH, 2019 - 10 Years in Business Party!
We will be hosting a special party to celebrate 10 years to the day exactly that I started my financial planning business. We will invite our clients and referral partners, so stay tuned for more information on this!
Since I started this newsletter for professional purposes, people have commented to me about the clever title "On It With Offit", a play of words on my strange last name. However, while in high school, I was actually on our high school newspaper, The Pipeline, for four years. During that time, people knew me for my original "Get On It With Offit" column, a goofy and philosophical column of random thoughts, rhetorical questions , and dry humor that was also distributed monthly. I know it's hard to believe, but it actually had a positive reception.
Eventually during my senior year I became Editor-In-Chief of this newspaper and transitioned the column to a friend of mine which he aptly named "The Downlow from Dave". This version of my newsletter now is far different than it was over 15 years ago, and I am a different person than I was 15 years ago. The guy writing the original version never would have guessed he would one day become a financial planner and entrepreneur.
What were you doing and where were you 15 years ago? If you would like to share, I would love to hear it.
Just over a decade ago, 62% of Americans were invested in the stock market. Today, we are at the lowest level of American stock market investors in decades, at approximately 50%. Over this period, the stock market more than doubled.
That top 1% you keep hearing about? Here’s what it takes in annual income around the world: $81K in India, $105K in China, $215K in France, $478K in the U.S., $694K in Singapore and $891k in U.A.E.
There were 3.85 million-American babies born in 2017, the lowest number since 1987.
The day after the Super Bowl is the #1 sick day every year and a third of all American workers believe it should be considered a national holiday.
-Fox 28, Spokane
Approximately 224 million roses are grown for Valentine’s Day and 15% of women admit they will send flowers to themselves.
-Crazy Valentine's Day Facts
The only member of the British House of Commons who is not allowed to speak is the person called the Speaker of the House.
The S&P 500 jumped 7.87% in January of 2019, its best January performance since 1987.
“Honest criticism is hard to take, particularly from a relative, a friend, an acquaintances, or a stranger.”
-Franklin P. Jones
After one of the worst months for the S&P 500 Index in almost a decade, equities bounced back strongly in January to begin 2019 on a positive note.
The yield on the 10-year US Treasury dipped sharply in early January, hitting its lowest intraday yield level since early 2018. Although markets were more in a “risk on” mode for most of January, a more dovish stance by the Fed kept rates in check in the latter part of the month. Most pockets of fixed income turned in gains to begin the year.
The government remained shut down for most of January, although a temporary agreement was made late in the month to re-open the government through mid-February. As a result, some economic data was not released in January, but data that was released continues to point to economic growth.
Despite ongoing headline risks, we believe fundamentals are what matter in the long-run and current economic indicators remain positive.
After a tough December and fourth quarter for equities, most investors were glad to turn the page from 2018 and move on to 2019. Pessimism had reached extreme levels and market metrics pointed toward oversold conditions late in 2018. Stocks across the board snapped back sharply to begin the new year as a “risk on” attitude ensued. January turned out to be a much more positive environment for equity investors with broad gains enjoyed across many parts of the equity markets.
The numbers for January were as follows: The S&P 500 advanced 8.01%, the Dow Jones Industrial Average rose by 7.29%, the NASDAQ Composite gained 9.79%, and the Russell 2000 Index, after being one of the worst pockets of equities in 2018, rallied 11.25% for the month. Growth stocks, as measured by the Russell 1000 Growth Index, resumed their leadership compared to value stocks, as measured by the Russell 1000 Value Index, gaining 8.99% and 7.78%, respectively, in January.
International equities also rallied in January. Trade issues with China continue to loom, but headwinds like multiple rate hikes in the U.S. and dollar strength will likely be less intense for international equities in 2019. With this backdrop, emerging market equities, as measured by the MSCI Emerging Markets Index, gained 8.77% in January. The MSCI ACWI ex USA Index, a broad measure of international equities, performed strongly as well as it advanced by 7.56% during the month.
Fixed Income Markets
Although there was more of a “risk on” appetite to the markets in January, yields moved lower and created a positive backdrop for broad areas of fixed income to begin the New Year as well. The yield on the 10-year U.S. Treasury declined during the month from 2.69% to 2.63%.
High-yield bonds were exceptionally strong in January and benefited from the “risk on” attitude, but most pockets of fixed income also advanced in January. Overall, the Bloomberg Barclays U.S. Aggregate Bond Index gained 1.06% in January, keeping up strong momentum from December.
The Bloomberg Barclays U.S. Credit Index gained 2.16% and the Bloomberg Barclays U.S. Aggregate Corporate High Yield Index advanced by 4.52% in January. TIPS and muni bonds also gained during the month.
S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index.
Dow Jones Industrial Average - The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy.
NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes approximately 5,000 stocks, more than most other stock market indices. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indices.
Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index which includes the 3,000 largest companies in the U.S., based on market capitalization. As of the latest reconstitution, the average market capitalization was approximately $762.8 million; the median market capitalization was approximately $613.5 million. The largest company in the index had an approximate market capitalization of $2.0 billion and a smallest of 218.4 million.
Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
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E – BOffit@OffitAdvisors.com
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The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.