Springfield Area Blog

Here are some items of interest that every educated consumer (and you are!) should enjoy.  Have a great weekend.

Rick

By the Numbers – Barry Habib

1. PROFITS – The S&P 500 companies reported +48% more in profits for calendar 2007 than they did in calendar year 1999, but last year's total earnings for all 500 companies was 20% less than 2006 (source: S&P).

2. STOCKS IN CHINA - After gaining +353% during the last 2 calendar years (2006-07), the Chinese Shanghai stock index has fallen 34% YTD through last Friday. The Shanghai index is an unmanaged index that is generally considered representative of the Chinese stock market. These international securities involve additional risks including currency fluctuations, differing financial accounting standards and possible political and economic volatility (source: BTN Research).

3. REBALANCE OR NOT? - If you allocated $100,000 in a pretax account on 1/01/83 between stocks (60%) and bonds (40%) and never rebalanced the portfolio, the account would be worth $1.51 million on 12/31/07. That equates to a +11.5% annualized total return over the 25-year period. Annual rebalancing back to the original 60/40 allocation would have generated $1.46 million or an annualized total return of +11.3%. The S&P 500 was used as the stock proxy. The Lehman Brothers Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 10 years, was used as the bond measurement. (source: BTN Research).

4. RECORD LEVELS - The price of a barrel of oil closed last Friday (4/11/08) at $110.14, a +78% increase over its closing price ($62.01) from exactly 1-year earlier (4/11/07). The highest closing price ever for oil ($110.87) was set last Wednesday (source: New York Mercantile Exc).

5. WHERE IT COMES FROM - More than half of the oil the US imports (52%) comes from the 4 countries of Canada, Saudi Arabia, Mexico and Venezuela (source: Energy Information Admini).

6. LOYAL TO THE COMPANY - 45% of employees say the benefits provided by their employer are an important part of their decision to stay on the job (source: MetLife).

7. NOT ENOUGH - Only 23% of Americans at least age 55 have accumulated savings and retirement assets of at least $250,000 (source: Employee Benefit Research Institute).

8. SAFE MONEY - As of last week, the total value of money market funds exceeded $3.5 trillion, an all-time record. The total is up $1.1 trillion in the last 12 months (source: Investment Company Institute).

9. NO TRIP TO THE MALL - American consumers are expected to increase their online purchases by +17% in 2008 over the previous year to $204 billion. Projections include the purchase of $27 billion of clothes, $24 billion of computers and $19 billion of autos (source: National Retail Federation).

Courtesy of Katherina Kalman * Gorman & Gorman Home Loans