Issues High Net Worth Christians Face

As a committed Christian living in today’s world, it can be a daily challenge to navigate the social, career and financial aspects of your life. Particularly when it comes to finances, the world teaches that money offers success and contentment, but the Bible paints a different picture.

We know from experience that money doesn’t buy happiness. We live in the wealthiest country in the world, yet many Americans suffer from financial fear and discontentment. Still, we are bombarded every day with messages that tempt us to buy more things, purchase more experiences, and pile up more debt.

The Sherman SITREP

The Sherman SITREP

...As the stock market continues to hit new highs it might be a shock to hear how few Americans actually own stock.  According to a detailed study of stock ownership by New York University economist Edward Wolff, 84% of stocks available in the United States are owned by just the top 10% most-wealthy households.  Furthermore, more than 93% of all stock is owned by just the top 20% of households.  That means that the bottom 80% of households in the United States only own about 7% of the total stock market.  And, he notes, his research includes everything, direct ownership of stocks and indirect ownership through mutual funds, trusts, IRA’s, Keogh plans, and other retirement accounts.  Put bluntly, the policies of the Fed and the government that set the stage for the current long bull market greatly favored the rich, and they indeed got very much richer.

The Eyes Have It

The Eyes Have It

AND THE LEADER IN BIOMETRIC IDENTIFICATION IS INDIA!

Remembering passwords, especially if you follow best practices and have unique 12- to15-character passwords for each account, can be challenging.

Even when you follow best practices, which many people do not, passwords are vulnerable to data breaches. The Harvard Business Review recently reported password insecurity is one reason businesses have been opting for biometric technology such as:

• Fingerprint readers
• Eye scanners
• Voice recognition systems
• Hand geometry

Sherman SITREP

Sherman SITREP

What is the number one financial regret of Americans? 

According to personal finance website Nerd Wallet, it turns out that roughly 71% of Americans express regret about their ability to manage their money.  First on the list was not planning early enough (48%), followed by too much spending on non-essentials (39%), credit-card debt (33%), and not having a budget (32%).  While baby boomers led in the way in the “not planning early enough” category, Generation X and millennials were tied in regretting spending on non-essentials.

THE SLOW-AS-MOLASSES BULL MARKET

THE SLOW-AS-MOLASSES BULL MARKET

THE MARKETS

Slow and steady... 

It has been 332 days since the Standard & Poor’s 500 (S&P 500) Index experienced a 5 percent drop, reported Barron’s. If there isn’t a selloff on Monday or Tuesday, this will become the longest rally without such a drop.

During this period, the Index has gained 33 percent. Think about that for a moment: 33 percent over 332 days. By Barron’s calculations, the market has gained less than 0.1 percent per day. That’s a very slow rate of increase, relatively speaking. The longest-ever rally without a 5 percent drop, which began in November 1994, was accompanied by a gain of 56 percent or 0.17 percent per day.

The most recent issue of The Economist pondered the phenomenon of the slow-as-molasses bull market that has pushed asset prices higher:

Ig Nobel Prizes to “honor achievements that first make people laugh, and then make them think.”

Ig Nobel Prizes to “honor achievements that first make people laugh, and then make them think.”

IT'S THE IG NOBEL AWARDS! On September 14, the 27th First Annual Ig Nobel Prize Ceremony kicked off with a flight of paper airplanes.

The winners were chosen by the publishers of the Annals of Improbable Research, which reviews, “Real research, about anything and everything, from everywhere. Research that's maybe good or bad, important or trivial, valuable or worthless.” The most important characteristic of the works published is they make people laugh and think.

The evening’s entertainment included ceremonial bows from returning Ig winners John Culvenor, who received the 2003 Physics Prize for analyzing the forces required to drag sheep across various surfaces, and Deborah Anderson, who received the 2008 Chemistry Prize for testing whether a dark cola is an effective spermicide. 

Aftermath of Hurricane Harvey and potency of Hurricane Irma Dominated Hearts and Minds, But There Were Some Diversions

The Markets

Last week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated hearts and minds, but there were some diversions and some welcome news, too.

The NFL kicked off its 2017 season with the Chiefs’ win over the Patriots. The men’s U.S. soccer team tied Honduras to stay in the running for a World Cup spot. And, Sloane Stephens made the jump from 957th best on the women’s tennis tour to U.S. Open Champion.

 

Also, last week, President Trump signed a bipartisan bill authorizing relief for victims of Hurricane Harvey. The damage from Harvey has been estimated at about $50 billion, reported Yahoo! Finance, and the damage from Hurricane Irma may be even greater.

The signed bill also raised the debt ceiling, avoided a U.S. Treasury default, and funded the government for three months. These aspects of the legislation may have been more important to stock markets, according to a source cited by Barron’s:

Millennials are Leading a Viewing Revolution

The Markets

MILLENIALS ARE KILLING IT! A recent article in Buzzfeed listed headlines announcing the various things Millennials have “killed” or are “killing.” The list included Big Oil, the NFL, the workday, the cereal industry, and bar soap.

Here’s another industry that is being undermined by millennials’ preferences: cable and satellite television. Millennials are leading a viewing revolution. They are unwilling to ante up for cable and satellite subscriptions, preferring less expensive Internet and streaming services that provide content via the World Wide Web.

A 2017 survey from Videology found more than half of millennial men (ages 18 to 34) have stopped paying for cable, and Forbes reported:

Markets Around the World Appear to be Benefitting From Global Economic Recovery

The Markets

Here, there, and everywhere… 

Markets around the world appear to be benefitting from global economic recovery. 

After pointing out the United States’ economy is the heart of the global financial system, Barron’sreported:

“The Standard & Poor’s 500 index has tirelessly amassed 30 record closes this year, but is up just 1.2 percent since March 1. Meanwhile, nearly every foreign stock market has sprinted ahead…We wrote on March 25 about how a global recovery should goose smaller, fresher bull markets abroad. By now, it is firmly becoming the consensus view – metals are rallying, with copper up 18 percent this year; the MSCI All Worlds Index has risen for eight straight months.”

North Korea May be a Little Country, But It Can Churn Up Big Trouble

North Korea may be a little country, but it can churn up big trouble.

The possibility that verbal hostilities between the United States and North Korea could trigger geopolitical conflict had investors on the run last week. In the United States, the Standard & Poor’s 500 Index fell by 1.4 percent, the Dow Jones Industrial Average lost 1.1 percent, and the NASDAQ Composite finished 1.5 percent lower.

Financial Times explained:  “The sell-off came as U.S. President Donald Trump escalated the war of words against the North Korean regime’s accelerated [program] of nuclear testing.

Who's Been Buying Shares of Company Stock?

The Markets

There was some good news and some bad news last week.Do we have central banks to thank?

First, the good news: Thanks to consumer spending and an upturn in federal government spending, the U.S. economy grew faster from April through June this year. Gross domestic product (GDP) grew by 2.6 percent during the period, according to the advance estimate for economic growth. This was an improvement over growth from January through March, when GDP increased by 1.2 percent.

Now, the bad news: Personal income did not grow as fast from April through June as it did from January through March. Wages and salaries grew at a slower pace, as did government social benefits and other sources of income. The New York Times wrote:

“Wage growth, however, decelerated despite an unemployment rate that averaged 4.4 percent in the second quarter.

Good News, Bad News...

The Markets

There was some good news and some bad news last week.Do we have central banks to thank?

First, the good news: Thanks to consumer spending and an upturn in federal government spending, the U.S. economy grew faster from April through June this year. Gross domestic product (GDP) grew by 2.6 percent during the period, according to the advance estimate for economic growth. This was an improvement over growth from January through March, when GDP increased by 1.2 percent.

Now, the bad news: Personal income did not grow as fast from April through June as it did from January through March. Wages and salaries grew at a slower pace, as did government social benefits and other sources of income. The New York Times wrote:

“Wage growth, however, decelerated despite an unemployment rate that averaged 4.4 percent in the second quarter.

U.S. Monetary Policy Isn’t the Only Phenomenon Investors May Want to Keep an Eye On

Do we have central banks to thank?

 

Low interest rates, accommodative monetary policy, and improving economic growth have helped stock markets around the world reach record highs, reports Barron’s:

“…a look around the globe shows the surge of the U.S. market to new peaks to be anything but unique. Major [markets] in Europe and Asia also have been setting records.

...Trends That May Really Stir Things Up During the Next Few Decades...

MERRIAM WEBSTER DEFINES ‘DISRUPT’ AS ‘TO BREAK APART,’ AND ‘TO THROW INTO DISORDER.’ While disruption doesn’t sound like something anyone would enjoy much, it has the potential to create investment opportunities for those who share a vision and are willing to take risks. 

Morgan Stanley recently wrote, “It’s hard to think of an industry that won’t be touched in some way by technological disruption over the next decade.” Here are a few of the trends that may really stir things up during the next few decades:

AFFORDABLE Car Crisis in the United States?

It doesn’t appear to be common knowledge but there may be an affordable car crisis in the United States. The latest Bankrate.com Car Affordability Study found:

“…typical households in most of America’s larger cities don’t earn enough to afford the average new vehicle, under a common budgeting rule for buyers… The ‘20/4/10’ rule says you should aim to put down at least 20 percent of a vehicle’s purchase price, take out a car loan for no longer than four years, and devote no more than 10 percent of your annual income to car payments, interest, and insurance. If you can’t stay within those lines, you can’t afford the car.”

Measuring "Happiness" or "Satisfaction with Life"...

It has been a very good year, so far.
Through the end of last week, the Standard & Poor’s 500 Index posted 24 record highs and delivered returns in the high single digits. The
MSCI World ex USA Index was up more than 11 percent, and the MSCI Emerging Markets Index gained more than 17 percent.
After reading those numbers, many people would assume bond markets are down for the year. After all, stock and bond markets tend to
move in different directions. Zacks explained,
“Stock and bond prices usually move in opposite directions. When the stock market is not doing well and becomes risky for investors,
investors withdraw their money and put it into bonds, which they consider safer. This increased demand raises bond prices. When stocks
rally and the risk seems justified, investors may move out of bonds and into stocks, driving stock prices up further.”
That hasn’t been the case recently. Bonds have been delivering attractive returns, too.