Weekly Market Commentary
Stocks rose on the final trading day before a holiday weekend after President Biden introduced his $2 trillion infrastructure and economic recovery package. The S&P crossed the 4,000 mark for the first time. For the week, the Dow rose 1.64 percent to close at 33,153.21. The S&P gained 2.84 percent to finish at 4,019.87, and the NASDAQ climbed 3.88 percent to end the week at 13,480.11.
|Returns Through 4/01/21||
|Dow Jones Industrials (TR)||1.64||
|NASDAQ Composite (PR)||3.88||4.77||84.59||25.27||23.65|
|S&P 500 (TR)||2.84||7.43||65.51||17.24||16.42|
|Barclays US Agg Bond (TR)||0.00||-3.28||0.64||4.67||3.13|
|MSCI EAFE (TR)||0.48||4.21||50.77||6.28||9.47|
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.
Not Going — 2.17 million freshmen started college in the fall of 2020, down 13 percent (327,513 fewer students) from the 2.5 million freshmen who began college in fall 2019 (source: National Student Clearinghouse, BTN Research).
Status Quo for Two More Years — The most recent meeting of the Fed ended on March 17 with its interest rate forecast calling for no interest rate hikes until at least 2023 (source: Federal Reserve, BTN Research).
They Will Spend It Somewhere — American consumers spent $2.81 trillion on foreign imports of goods and services in 2020. American consumers are forecasted to receive $800 billion in the form of stimulus payments, unemployment benefits, and child tax credits through the American Rescue Plan Act of 2021, and then turn around and spend $360 billion on foreign imports. Chinese companies are predicted to sell Americans $60 billion of the $360 billion (source: Allianz, BTN Research).
WEEKLY FOCUS – National Financial Literacy Month
In 2004, the Senate passed a resolution officially recognizing April as National Financial Literacy Month, a month dedicated to raising awareness about financial illiteracy and promoting financial education events across the country. Despite this longstanding effort, our overall population still has room to grow in this area. In studies compiled by the U.S. Financial Literacy and Education Commission, two-thirds of adults couldn’t answer four out of five questions on fundamental financial topics like mortgages, interest rates, inflation, and risk.1
A lack of financial literacy creates huge costs for society at large, including marital discord, higher taxes to create safety nets, unpaid debts, and increased prices. Many experts point to financial illiteracy as a contributing factor to the recession of 2008. Yet less than half of America’s states require students to take a course on personal finance. And a limited classroom experience can’t take the place of financial principles taught – and caught – from parents and grandparents.
Here are some areas to focus on when educating your children and grandchildren on this topic:
- Teach young people how debit and credit cards work and when it’s better to use one or the other. Teach them the importance of a healthy credit score and how to build one.
- Show them how to pay bills online through their bank’s service or a direct pay program from a creditor or service provider.
- Help them ensure their lifestyle fits their income and that they understand what comes in and what goes out for bills, how to weigh wants and needs, and how much to allocate to savings and retirement accounts.
- Demonstrate the impact of compounding interest on savings and the big benefits of starting to save at a young age. Explain how investing works and potential risks and rewards, so they can make informed decisions on their financial future.
To learn more about talking to your kids or grandchildren about money matters, contact our office. Leaving a legacy of financial literacy is as important as bequeathing tangible assets. Working together, we can make this legacy a reality.
This commentary brought to you by J. Graydon Coghlan, CRPC
and the team at CFG Wealth Management, Inc.
4370 La Jolla Village Drive, Suite 630 San Diego, CA 92122
Phone: (858) 550-3960 Fax: (858) 550-3969 Toll Free: (800) 884-5121
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright November 2020. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3533806.1