As we head into 2015 we once again find ourselves questioning how much longer this market can keep moving along. Through the past 5 or 6 years this market has proven to be very resilient. Each year it seems like there are new reasons to doubt it or to question why it keeps going. Yet it seems like Mr. Market continues to put his/her headphones on and ignore the noise. You could argue that this has been the least respected bull market of our time.
2015 looks to be no different. Oil prices are very volatile (is that good or bad?), the Middle East is simmering, Europe is having economic issues, Russia is an unknown, and the list goes on. As we have said in the past we think it makes sense to keep those headphones on and ignore the noise that is thrown at us on a daily basis. Yes there are issues going on in the world that are concerning. However do not let those distract you from how far we have come and where we are today. Recently, Joshua Brown (the reformed broker), posted a list on his blog titled “These are the facts”. He listed simple facts that he observed about the recent numbers on the US economy. We have copied the blog post below:
Here are the facts:
The US economy has now added more than a million net new jobs over the last three months. This was the best 90 days’ worth of hiring since 1997.
More jobs were created in 2014 than during any year since 1999.
759,000 people just joined the labor force and there was no post-holiday seasonal decline – it may be that temporary workers are sticking.
Average hourly wages rose .5% in January.
The cost of living has only risen .8% over the last year while wage growth has outstripped it, rising by 2.2%.
21 of 50 states put through minimum wage hikes, including populous ones like NY, FL and NJ.
US energy consumers have received a cumulative $14 billion tax cut (and counting) as a result of the oil price decline since June.
Consumer confidence just smashed through the highest level since August 2007. Consumers are saying their “present condition” is the best it’s been since January 2008.
Auto sales rose 14% in January 2015 versus 2014, with 1.15 million vehicles sold in the US. Auto sales are now on an annualized pace of 16.6 million vehicles, the highest rate since 2006.
In December, commercial loan demand grew for the first time since June. Consumer loan applications and approvals are also expanding with dirt-cheap borrowing costs at levels that were previously unimaginable.
Single-family housing starts jumped 7.2% in December to an annual pace of 728,000. This is the best level for new home groundbreaking since March 2008. There’s more on the way – single-family home building permits rose 4.5% to their highest level since January 2008.
20% of consumers report that “jobs are plentiful” versus just 25% who say that jobs are hard to find. The differential between the two was cut in half between December and January, from -10 to -5, and shrinking.
96% of Americans with 401(k) accounts are actively participating and the average savings rate is 12% of salary (Fidelity). Among employees contributing to a 401(k) for ten years or more, the average balance is $248,000, up 11% from the end of 2013. The average balance across all 401(k) accounts is now over $100,000 and it has doubled since the end of 2008 (Vanguard).
US household net worth hit $81.5 trillion. This includes all stocks, bonds, properties and business values, minus any debts or liabilities. This is a new all-time record.
You’re welcome to attach any caveats to this data that you’d like to. You can qualify some or all of it. You can speculate on when any of these trends may end or whether the data comes from trustworthy sources. You can point out the various ways in which any or all of these data points are “not telling the real story” or you can dismiss the meaning of the numbers themselves when compared with A, B or C.
That’s up to you. But these are the facts.
These are the facts. We have come a long way. Our thoughts for 2015 are not to worry too much about what is going to happen in the future, or dwell on what has happened in the past. Instead, cherish the present – after all it is a gift that will be lost if we let it.
As always, thank you for your business.
The Financial Advisory Group
The Reformed Broker: “Here are the facts” http://thereformedbroker.com/2015/02/08/here-are-the-facts/
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information provided is not guaranteed for accuracy or completeness. All performance referenced is historical and is no guarantee of future results. Economic forecasts set forth may not develop as predicted.