How often have you said, “How much higher can it go”? Well, we have an answer… Surprised? There’s no cliff at all. Quite the opposite in fact. And “How much higher can it go”? The answer has always been, “Much”. The returns after new highs are just about the same as returns after any period. It makes sense. The S&P 500 has averaged 10% since 1926. If stocks went down every time they went up, returns would be closer to zero than 10%. Reaching record highs regularly is the outcome one would expect. Cheers, John, Bill, Mark & Melanie
Proposed Tax Changes
The “American Families Plan” will be debated and finalized in the weeks to come. Here are the key proposed changes: New income tax brackets: New capital gains rates: 8% Net Investment Income Tax (NIIT): Certain high-income S-corporations will be subject to the NIIT, phased in, at thresholds of $400,000 for single filers and $500,000 for joint filers. New surtax: 3% will be added to the top income tax rate for those earning over $5 million, making the true new top rate 42.6% QBI: the maximum allowable Qualified Business Income deduction will be capped between $400,000 and $500,000. Back-door Roth Conversions: …
Think of It This Way
The Uncommon Average Since 1926, the US stock market has returned 10% a year on average, but the road to 10% has been bumpy. Returns in any given year have ranged from as high as 54% to as low as -43%. In fact, the S&P 500 had a return within plus or minus 2% points of this 10% average in only 6 of the past 95 calendar years. This uncommon average of the stock market is similar to the uncommon average associated with LeBron James. LeBron has averaged 27 points, 7 assists, and 7 rebounds a game during his entire …
Cool Market Facts for Hot Summer Days
#1. Don’t Wait for a Correction A person who invested $100 in the S&P 500 in 1960 and never sold would now have $43,132. An investor who employed a “buy the dips” strategy of buying in 1960, selling at new all-time highs, and waiting for a 10% correction before buying back, would have just $534. #2. How the Mighty Have Fallen In September 2000, General Electric was the world’s largest company, valued at almost $600 billion. Now, 21 years later, its value is $113 billion, about an 80% drop. What we’d always hear back then: “Just put your money in …