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We remain open and ready to serve our clients, but due to the recent rise in covid cases in our area, our physical office will be closed to outside visitors. If you need to deliver or retrieve paperwork from our office, please call our office when you arrive and we will greet you at the curbside The Markets When is bad news good news? Take a look at last week. Major stock indices in the United States hit all-time highs on Friday, despite a lackluster employment report and a surge in COVID-19 cases, reported Lewis Krauskopf of Reuters. During the week, we saw:
In light of this news, why were markets bullish? Signs the economic recovery is faltering create a strong incentive for Congress to pass a stimulus bill in 2020 instead of delaying until next year, reported Barron’s. An analyst cited by the publication said, “Under the circumstances, it is hard to be a seller of any risk asset as long as there is a good possibility of getting a deal done…” During the next few months, markets may be quite volatile. Hang tight and keep your eyes on your long-term financial goals. WHAT DOES IT TAKE TO BE MIDDLE CLASS IN THE UNITED STATES? The not-so-simple answer is it depends on how you define ‘middle class.’
In a 2018 report, Pew Research Center defined middle class as middle income. “In our analysis, “middle-income” Americans are adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. In 2016, the national middle-income range was about $45,200 to $135,600 annually for a household of three.” In November, USA Today shared an analysis by Michael Sauter that adopted a different standard. It considered U.S. family income from “…the lower boundary of the second quintile and the upper boundary of the fourth quintile [of the U.S. Census Bureau’s 2018 American Community Survey], representing in total 60 percent of American families…The analysis made some cost-of-living adjustments and found, “…the range of income that could be considered middle class in a given state.” In the states with the highest median (the number in the middle of the list) family incomes, middle-class income ranged from:
States in the middle of the pack for median family income had these middle-class income ranges:
In the states with the lowest median family incomes, the middle-class income range was:
It’s interesting to note the 2020 federal poverty threshold set by the U.S. Department of Health and Human Services, which determines eligibility for various federal programs, was $26,200 for a family of four. Not everyone uses income to define the middle class. Richard V. Reeves, Katherine Guyot, and Eleanor Krause of Brookings explored the question, asking: “Is middle-class status a reflection of economic resources, especially income or wealth? Or is it denoted more clearly by occupational status and/or educational attainment? Is it, rather, a state of mind, a set of aspirations, or revealed through behavior, cultural tastes, or by certain kinds of consumption? Is it a question of how we define ourselves?” What do you think? Weekly Focus – Think About It “Each day is always breaking out anew Aspirations swirling round what you do” --Richard L. Ratliff, Author Investment Advisory services offered through Guidance Investment Advisors, LLC, doing business as Guidance Wealth, LLC, a registered investment adviser registered with the Securities and Exchange Commission. SEC Registration does not imply any level of skill or training. * These views are those of Carson Coaching, and not the presenting Investment Adviser Representative or the Representative’s Registered Investment Adviser, and should not be construed as investment advice. * This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named registered investment adviser. * Weekly Market Commentaries are sent as mass email communications by the designated email address weekly_update@guidancewealth.com. * Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal. * The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system. * International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete. * There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. * Asset allocation does not ensure a profit or protect against a loss. * Consult your financial professional before making any investment decision. Sources: https://www.reuters.com/article/usa-stocks/futures-near-record-highs-as-stimulus-hopes-build-idUSKBN28E1IV https://www.bls.gov/news.release/empsit.nr0.htm https://www.barrons.com/articles/stocks-hit-new-highs-as-reopening-euphoria-rages-on-can-it-last-51607130695?mod=hp_DAY_Theme_1_1 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-07-20_Barrons-Stocks_Hit_New_Highs_as_Reopening_Euphoria_Rages_On-Can_It_Last-Footnote_3.pdf) https://www.axios.com/pandemic-unemployment-assistance-expiring-8461b73d-1f9c-4cf2-ba6c-ed93e9ede5f0.html https://www.gao.gov/about/press-center/press-releases/need_for_transparency_2020.htm https://www.conference-board.org/data/consumerconfidence.cfm https://www.wsj.com/articles/as-covid-19-patients-stretch-hospitals-some-doctors-ration-intensive-care-11607022592 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-07-20_WSJ-Covid-19_Hospitalizations_Single-Day_Deaths_Hit_New_US_Highs-Footnote_7.pdf) https://www.pewresearch.org/fact-tank/2018/09/06/the-american-middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-families/ https://www.usatoday.com/story/money/2020/11/21/income-it-takes-to-be-considered-middle-class-in-every-state/43067013/ https://aspe.hhs.gov/poverty-guidelines https://www.brookings.edu/research/defining-the-middle-class-cash-credentials-or-culture/ https://www.brainyquote.com/quotes/gerard_butler_636853?src=t_middle_class www.goodreads.com/quotes/tag/aspiration Comments are closed.
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