Our lives, as well as the economy, are filled with numbers. We have our address, home phone number, cell phone number, work address and phone number, Social Security number, driver’s license number, mortgage amount, net worth, total debt, unemployment rate, National debt, stock market value, …and the list could go on for ever.
Here are a few numbers to consider.
- During the worst bear market, The Great Depression, the S&P 500 index fell over a 33 month period by more than 86 percent. More than half of the loss occurred in the last five months of the depression.
- From the peak value in October 2007 to its March 2009 closing low, the S&P 500 index lost 56.39 percent.
- From the November 2008 low of 752.44 to March 16, 2009 close of 753.89, the S&P 500 was basically unchanged. Since the low did not occur at a month-end, many investors are unaware of how low their accounts actually fell.
Housing prices in some large metropolitan areas are down as much as 38 percent.
-A reasonable price per barrel of oil according to OPEC ministers should be between $60 and $80.
-The current National unemployment rate is 8.1 percent.
-Payroll employment declined by 2.6 million during the last four months.
-After reaching the November 2008 bottom, the S&P 500 rallied 24.22 percent in a mere 30 days reached 934.70 by January 6th.
-The National budget for 2010 is estimated to reach $3.55 Trillion in spending.
-March 2nd offering of seven year US Treasury Notes were issued yielding 2.748 percent.
-In 2008, 12.4 percent of all workers belonged to a union, representing 16.1 million workers.
-Approximately 75.3 million workers were paid by the hour in 2008.
- In January 1993, the National debt was approximately $4.2 Trillion.
-In February 2009, the National debt was approximately $10.9 Trillion.
-In 1835, President Andrew Jackson balanced the budget and paid off the National debt. This was the last time the US was debt-free.
In many cases, these numbers may not have a direct impact on you or your family. However, many of these figures directly impact each of us or our children and their children. During last October and November, many investors were selling completely out of the market. For those who panicked and sold their investments, they missed the fast but significant rally that occurred after November 20th.
The losses occurring since this rally have been caused more by the lack of news than actual bad news. Yes, there have been news blips reporting job losses by the thousands, but for most of us, this news was expected and not a surprise. We also expected retailers to report lower store sales for recent months as compared to the prior year. And we were not surprised for the unemployment rate to continue to climb. Much of the surprising news, those items that created panic or uncertainty, was actually released late in 2008. So far this year, time is starting to heal our economy. Have we seen the low in the markets? No one can say with certainty that we will not retest the March low or even fall lower. However, we are starting to see some signs of healing. Housing starts were reported this week, and they were higher than expected as were building permits. Citi Bank issued a statement they had made money in January and February, clearly information welcomed by the markets and regulators alike.
As it has been said many times before, investing when the majority are selling has greater opportunity of creating long-term profits than waiting for the ‘coast to clear’ and follow the herd.
If you need assistance with investing, please contact my firm, Quality Financial Concepts, or one of the other Certified Financial Planner professionals in our area.